ICAZ - Institute of Chartered Accountants of Zimbabwe

IFAC News
2) New and Updated Free Resources from the SMP Committee
    a. Practice Management Guide Issued
    b. QC Guide (Second Edition) Planned for July
    c. ISA Guide (Second Edition) Slated for August
    d. International Center for SMPs Continues Expansion
    e. SMP Committee Twitter Launched
3) SMP Committee Provides Input into the IESBA's and IAASB's Strategies
4) SMP Committee Analysis Highlights the Expanding Role of SMPs in Advising SME Clients
5) IFAC Issues Letter to G-20 Leaders: Governments Should Practice What they Preach
6) IFAC Releases 2009 Annual Report

Other SMP News from Around the World
7) Private Company Financial Reporting Update
    a. "Train the Trainers" Workshop in Cairo, Egypt
    b. Selection of Members for the SME Implementation Group
    c. Report Released on Future of Standard Setting for US Private Companies
8) EC Consultations on IFRS for SMEs and ISAs
9) FEE/CNDCEC Congress Venice 2010 Presentations
10) Share SMP eNews with Your Colleagues

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Feature

1) IFAC Board Approves Recommendations to Assist SMPs

The International Federation of Accountants (IFAC) has approved a set of recommendations designed to expand support to member bodies in their work to assist small and medium practices (SMPs). The recommendations were approved by the IFAC Board at its June 2010 meeting, and are the culmination of a strategic review initiated by the Board at its February 2009 meeting.

The recommendations are intended to give SMPs the additional practical support needed to provide high-quality professional services to their main clients: small- and medium-sized entities (SMEs). IFAC considers the health of the SME sector, which accounts for the majority of private sector employment and gross domestic product (GDP) worldwide, to be crucial to global economic growth and financial stability, as well as the public interest. Through these recommendations, IFAC also seeks to enhance SMP participation in international standard-setting and regulatory and policy development.

The recommendations can be categorized into the following areas:

Increase the visibility, voice, and profile of SMPs - for example, by communicating and advocating the importance of the SME sector and the role of SMPs in supporting this sector;
Expand the monitoring of global regulatory reform to ensure its suitability for SMEs and SMPs;
Develop guidance, resources, and tools-in collaboration with member bodies-that help promote and build the capacity of SMPs to deliver high-quality accounting, assurance, and business advisory services; and,
Enhance the extent and effectiveness of participation of SMPs in the development of IFAC's standards through increased SMP representation on certain independent standard-setting boards and other activities where SMP contributions are essential.
The strategic review leading to the recommendations was carried out by a task force drawn from the Board, the International Auditing and Assurance Standards Board (IAASB), and the IFAC Small and Medium Practices (SMP) Committee. The recommendations are the outcome of a consultative process that included an online survey-sent to recognized regional organizations, other accountancy groupings, and all IFAC member bodies-which resulted in responses from a broad cross-section of IFAC stakeholders. In addition, at the IFAC-convened Chief Executives Strategy Forum, over 40 chief executives representing a diverse group of IFAC member bodies discussed the review results and provided suggestions which helped to shape the final recommendations.

While the SMP Committee will play the lead role in implementing the recommendations, and has been given an expanded mandate to do so, contributions from many areas of IFAC, its member bodies, and the independent standard-setting boards will be critical to their successful implementation. IFAC members can make the greatest contribution at this stage of the implementation process by increasing the voice and visibility of their SMP constituencies, seeking greater SMP representation, and sharing resources with IFAC to help with the training and development of SMPs globally. IFAC's independent standard-setting boards and other groups (such as the PAIB Committee and others) will be encouraged to further embed SMP and SME considerations into their work programs-for example, through increased involvement of SMPs in projects and by adopting a "Think Small First" approach to tackling complexity.

IFAC President Robert Bunting noted this review during a speech before the AICPA Council on June 25, 2010. In addition to the review, Mr. Bunting addressed a number of topics related to SME and SMP issues as well as IFAC's work to address these issues. The speech can be accessed here.

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IFAC News

2) New and Updated Free Resources from the SMP Committee

a. Practice Management Guide Issued

The committee issued in June 2010 the Guide to Practice Management for Small- and Medium-sized Practices. The guide discusses strategies for SMPs to better manage their practices and ultimately operate in a safe, profitable, and professional manner. It is comprised of eight stand-alone modules that contain practice management principles and best practices on a comprehensive range of topics, from starting the business to succession planning. It also features case studies, an office manual, checklists and forms, and a list of further reading. It can be downloaded free of charge from the link above, and is available in a PDF for printing and an interactive version with internal links aiding navigation. The press release can be found here.

b. QC Guide (Second Edition) Planned for July

At its June meeting the committee also approved the second edition of its Guide to Quality Control for Use by Small- and Medium-sized Practices, which is scheduled for release in late July 2010. This implementation guide is designed to help SMPs understand and efficiently apply the redrafted International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. The revised guide will conform to the revised and redrafted Code of Ethics for Professional Accountants and include improvements based on feedback from users of the first edition. The current edition of the guide can be found in the SMP section of the IFAC Publications and Resources page.

c. ISA Guide (Second Edition) Slated for August

The committee approved at its June meeting the second edition of its Guide to Using International Standards on Auditing in the Audits of Small- and Medium-sized Entities. This new edition, slated for launch in early August 2010, will conform to the International Standards on Auditing (ISAs) redrafted by the International Auditing and Assurance Standards Board for the Clarity Project. It will also include improvements based on feedback from users of the first edition. The new edition will consist of two volumes: the first describing the basic concepts of a risk-based audit conducted in conformance with the ISAs, and the second providing practical guidance for audits of small- and medium-sized entities (SMEs). The current edition of the guide can be found in the SMP section of the IFAC Publications and Resources page.

d. International Center for SMPs Continues Expansion

The Center continues to expand its resources section and now provides access to the following:

Relevant Links to free resources and tools from IFAC member bodies and other organizations (including categories devoted to practice management, implementing international standards and business advice)
The SMP/SME Discussion Board, where readers may submit their views on such subjects as practice management issues
Links to other IFAC resource centers such as the IAASB Clarity Center and a Database of Translations of IFAC publications
e. SMP Committee Twitter Launched

The SMP Committee is piloting Twitter as a vehicle for communicating and engaging with SMPs, member bodies and others. The SMP Committee Twitter will keep users up-to-date with global developments in the SMP/SME sector. Please visit http://twitter.com/IFAC_SMP and start following us.

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3) SMP Committee Provides Input into the IESBA's and IAASB's Strategies

The International Ethics Standards Board for Accountants (IESBA) issued an exposure draft (ED) on its proposed strategy and work plan for the next three years. The SMP Committee's response to the ED expressed the need for the IESBA to do more to help SMPs implement the revised and redrafted Code of Ethics for Professional Accountants.

The SMP Committee is also providing input into the International Auditing and Assurance Standards Board's (IAASB) strategy and work program for 2012-14. As a first step in the 18 month development process, the IAASB issued an online questionnaire in April, the results of which will be used to develop a formal Consultation Paper, outlining the IAASB's strategic focus and potential projects, to be issued in December 2010. The SMP Committee plans to respond to this paper and calls on member bodies, SMPs, SMEs, and others to do the same.

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4) SMP Committee Analysis Highlights the Expanding Role of SMPs in Advising SME Clients

The SMP Committee published an analysis of research on the business advisory services provided by SMPs. The paper, titled The Role of Small and Medium Practices in Providing Business Support to Small- and Medium-sized Enterprises, includes a review of global research ranging from academic studies and practitioner surveys to interviews of SMP partners. The analysis suggests that, due to increased regulatory complexity and a lack of in-house capacity, there is an increased demand from SMEs for business advisory services, including developing business plans and financial forecasts, identifying and managing risk, providing information technology, and conducting business valuation. The study finds that accountants are seen as competent and trustworthy advisors and are therefore well-positioned to fulfill this increased demand from SMEs. The press release is available here.

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5) IFAC Issues Letter to G-20 Leaders: Governments Should Practice What they Preach

In a letter issued in advance of the Toronto G-20 Summit, held June 26-27, IFAC called for broad and swift action by the G-20 leaders to greatly improve government transparency and accountability as a means toward global fiscal sustainability. The letter also urges the adoption of international standards to improve the quality of financial information. The complete letter and recommendations is accessible here.

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6) IFAC Releases 2009 Annual Report

IFAC recently released its annual report for 2009. This report highlights IFAC's response to the global financial crisis as well as initiatives that have positioned the organization as a more influential voice for the global accountancy profession. Featuring messages from IFAC President Robert Bunting, Chief Executive Officer Ian Ball, and Public Interest Oversight Board Chair Stavros Thomadakis, the annual report provides a detailed account of all the services delivered by IFAC in 2009 including those for SMPs. The annual report, which was developed digitally for the first time this year, also provides noteworthy interactive features. The annual report can be accessed here.

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Other SMP News from Around the World

7) Private Company Financial Reporting Update

The following developments relating to private company financial reporting are worth noting:

a) "Train the Trainers" Workshop in Cairo, Egypt

In June 2010, the International Accounting Standards Board (IASB) and the International Accounting Standards Committee Foundation (IASCF) conducted their fourth three-day "Train the Trainers" workshop to educate instructors to teach other professionals on the implementation of the International Financial Reporting Standard for Small- and Medium-sized Entities (IFRS for SMEs) in Cairo, Egypt. The workshop was sponsored by the World Bank, with the IASB providing the training materials. Participants came from countries such as Algeria, Colombia, Egypt, Italy, Jordan, Lebanon, Morocco, Palestine, Tunisia, and Yemen. Similar IASB/IASCF workshops are scheduled for Rio de Janeiro (August 2-4, 2010) and Panama (October 2010). For more information contact Michael Wells at This email address is being protected from spam bots, you need Javascript enabled to view it . Copies of the IFRS for SMEs in English, Spanish, Italian and Romanian, as well as presentations for the "Train the Trainer" workshops and training materials in PDF form, can be accessed here.

b) Selection of Members for the SME Implementation Group

The Trustees of the IASCF expect to select the 12-20 members of the IFRS for SME Implementation Group (SMEIG) at their meeting in July 2010. The SMEIG will have two main responsibilities: to develop and publish, after clearance by the IASB, Q&A guidance on implementation issues identified by IFRS for SMEs users; and to make recommendations to the IASB on the need to amend the IFRS for SMEs.

c) Report Released on Future of Standard Setting for US Private Companies

The chair of the Blue Ribbon Panel on Private Company Financial Reporting, created by the American Institute of Certified Public Accountants (AICPA) and the Financial Accounting Foundation, with support from the National Association of State Boards of Accountancy, to make recommendations on the future of standard setting for U.S. private companies, presented a preliminary report to the AICPA Council. The chair said that smaller companies have been struggling to understand and implement complex standards. As a result, more companies have been taking generally accepted accounting practices exceptions. Moreover, he said, there is a growing belief that differential standards may better meet the needs of private company financial reporting users.

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8) EC Consultations on IFRS for SMEs and ISAs

The European Commission (EC) has published a summary report of the 210 responses it received during its consultation of European Union (EU) stakeholders regarding the IFRS for SMEs. The EC has posted the summary report, all of the responses, and the November 2009 consultation document, here. In addition, the minutes from a stakeholders' meeting on the review of the EU Accounting Directives and the IFRS for SMEs held on May 25, 2010 are also available.

In a similar exercise, the EC received 89 responses to its public consultation on the adoption of the International Standards on Auditing (ISAs) from a range of stakeholders. The overwhelming majority of respondents to the consultation favor adoption of the ISAs at the EU level. A significant majority of the respondents support the application of the ISAs to the statutory audit of all companies, including small companies for which an audit is required. The consultation document, the responses and a report summarizing the responses can be found here. The EC has decided to defer a decision on ISA adoption until after the issue of a Green Paper on the subject later this year.

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9) FEE/CNDCEC Congress Venice 2010 Presentations

The FEE SME/SMP Congress was held on April 15-16, 2010 in Venice in cooperation with the national Italian institute Consiglio Nazionale dei Dottori Commercialisti e Degli Esperti Contabili. The event featured plenary sessions and a series of parallel sessions that focused on practical experience, lessons learned and the use of tools. The sessions covered subjects such as EU and international developments, SMEs' expectations from their accountants, auditing standards and guidance, cross-border activities, and services beyond auditing. The closing keynote speech was delivered by IFAC President Robert Bunting - his speech and video interviews from the event are available here. All presentations and other documents related to the event, including those of Sylvie Voghel, SMP Committee Chair, can be downloaded here.

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10) Share SMP eNews with Your Colleagues

The SMP Committee issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and let them know that they can subscribe to this and other eNews bulletins at the eNews sign-up page at www.ifac.org/e-news.

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ACCOUNTANTS: SUSTAINING VALUE CREATION
The 18th World Congress of Accountants, hosted by the Malaysian Institute of Accountants and IFAC, is November 8-11, 2010. The Congress will offer more than thirty panel discussions and speakers from The World Bank, Transparency International, the Financial Stability Board, the European Commission, IFIAR, and the IASB, among others. Thousands of delegates representing the profession from around the world will attend.

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IAASB Proposes Enhanced Standard on Using the Work of Internal Auditors

(New York/July 15, 2010) – Recognizing developments in the internal auditing environment and the evolving relationship between internal and external auditors, the International Auditing and Assurance Standards Board (IAASB) today released an exposure draft on a proposed revised standard that addresses the external auditor’s responsibilities relating to using internal auditors’ work during an audit.

The proposed International Standard on Auditing (ISA) 610 (Revised), Using the Work of Internal Auditors, aims to enhance the external auditor’s performance by providing a stronger framework for evaluating and using the work and assistance of an entity’s internal auditors. Related enhancements to the external auditor’s required considerations of the internal audit function are also proposed in ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment.

“Internal auditing standards and practices continue to evolve, as does the relationship between external and internal auditors,” said Prof. Arnold Schilder, IAASB Chairman. “Ensuring that global audit practices take account of these changes benefits both auditors and preparers. Through our revision of ISA 610, we believe external auditors will be better equipped to evaluate opportunities for effective coordination with internal auditors.”

Analyzing Benefits and Impacts of the Proposals

In addition to setting out the main proposals of the IAASB, the explanatory memorandum to the exposure draft pilots an approach for analyzing the benefits and impacts of the IAASB’s proposals. The approach provides a structured and transparent means for communicating the effects of proposals to stakeholders.

“Understanding the potential benefits and impacts of proposed changes is an integral part of developing high-quality standards,” said James Gunn, IAASB Technical Director. “This pilot will help inform the IAASB and further integrate the analysis of benefits and impacts into the standards-setting process.”

Matters on which the IAASB would like stakeholders’ input are set out in the explanatory memorandum to the exposure draft.

How to Comment

The IAASB invites all stakeholders to comment on its proposals. To access the exposure draft or submit a comment, visit the IAASB's website at www.iaasb.org/ExposureDrafts.php. Comments on the exposure draft are requested by November 15, 2010.

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July 2, 2010

The IFAC Update provides summaries of IFAC developments over the past month.

IFAC News in Brief

Consultation Paper on Proposals to Amend IFAC Constitution and BYlaws

The IFAC Board seeks comment from IFAC member bodies on proposed amendments to the IFAC Constitution and Bylaws. The final proposed amendments will be considered at the September Board meeting for recommendation to the Council in November 2010.

The purpose of the Consultation Paper is to (a) familiarize the members, associates, and affiliates, as well as the Public Interest Oversight Board, the Monitoring Group, and the Forum of Firms, with the nature of the proposed amendments and, (b) in particular, to seek comments on the two most significant proposed amendments, which relate to the selection of the Deputy President and the length of the terms of office of the President and the Deputy President.

For access to the Consultation Paper or to submit a comment, contact Laura Buijs, Governance Manager, This email address is being protected from spam bots, you need Javascript enabled to view it . The deadline for submitting comments is July 26, 2010.

Monitoring Group Issues Public Consultation Paper on its Assessment of the Effectiveness of IFAC Governance Reforms

The Monitoring Group seeks input on its assessment of the effectiveness of the reforms to the governance of IFAC. Interested parties are asked to comment on the merit of the preliminary conclusions as well as practical suggestions on how to implement them.

The deadline to submit a comment is August 15, 2010. To access the paper and to submit a comment, see www.iosco.org/news/pdf/IOSCONEWS189.pdf.

IFAC Issues Letter to G-20 Leaders: Governments Should Practice What They Preach

In a letter issued in advance of the Toronto G-20 Summit, held June 26–27, IFAC called for broad and swift action by the G-20 leaders to greatly improve government transparency and accountability as a means toward global fiscal sustainability.

Taxpayers, investors, and citizens in all nations are entitled to accurate and complete financial information about their governments, according to IFAC. They should demand that their governments provide a comprehensive picture of fiscal performance and position. This includes an accrual-based measure of surplus or deficit as well as full details of debt, other liabilities, contingent liabilities and guarantees, and future expenditures and the resources needed to support them.
IFAC’s letter contains the following specific, actionable recommendations:

Encourage governments to adopt accrual-based accounting;
Improve transparency and accountability of stimulus programs and bailouts; and
Adopt international standards to improve the quality of financial information.

To access the complete letter and recommendations, see www.ifac.org/financial-crisis.

IFAC Releases 2009 Annual Report

The annual report, which was developed digitally for the first time this year, also provides noteworthy interactive features, such as a timeline that captures significant events and accomplishments in 2009 and a chart that depicts IFAC's governance structure and an overview of its oversight and consultation processes.

To access the annual report, see www.ifac.org/About/2009-annual-report.php.

IFAC President Robert Bunting speaks at 35th Annual IOSCO Conference

IFAC President Robert Bunting spoke at the 35th Annual International Organization of Securities Commissions (IOSCO) Conference held June 6–7, 2010, in Montreal, Canada. Featured as a panelist speaker on the theme Striving for a Common Regulatory Approach, Mr. Bunting spoke on several key topics, including the role that accounting and regulatory communities should play in addressing the challenges posed by the sovereign debt crisis, the importance of a single set of internationally accepted auditing and accounting standards in developing a well-functioning common regulatory approach, and auditor independence. To access Mr. Bunting’s complete remarks from the conference, see http://press.ifac.org/speeches.

Comment sought on IFAC 2010–2012 Strategy and Work Plan to Serve Professional Accountants in Business

IFAC has released for comment an exposure draft (ED) setting out its proposed 2010–2012 Strategy and Work Plan, prepared by its Professional Accountants in Business (PAIB) Committee. The proposed strategic direction focuses on enhancing the profile, influence, and relevance of professional accountants in business and identifies two key objectives:

· Increasing awareness of the important roles professional accountants play in creating, enabling, preserving, and reporting value for organizations and their stakeholders; and

· Supporting the professional accountants in business within IFAC member bodies by facilitating the communication and sharing of good practices and ideas.

To access the exposure draft or to submit a comment, see www.ifac.org/Guidance/EXD-Outstanding.php. The comment period is open until July 14, 2010.

Business Reporting Project: Recommendations from key leaders

IFAC recently launched the next phase of its business reporting initiative with the publication of the first two articles featuring recommendations from key business leaders from around the world. IFAC will issue a total of five articles, with approximately one article published each month and the next article available in late July. The practical recommendations are taken from interviews with 25 business leaders and focus on improving corporate governance, business reporting, and auditing in the aftermath of the financial crisis.

We invite our member bodies to publish or post the articles on their websites and in their journals. Readers are also encouraged to comment on the recommendations of individual business leaders via a brief survey. The articles, along with transcripts of the full interviews and links to the surveys, are available at www.ifac.org/frsc. Based on the recommendations and reader input, IFAC plans to develop an overall concluding article and a follow-up action plan, as well as a principles-based International Good Practice Guidance, Evaluating and Improving Business Reporting in Organizations.

IAAER/ACCA 2010–2012 Research Program

The International Association for Accounting Education & Research (IAAER) and the Association of Chartered Certified Accountants (ACCA) are planning to fund a research program for 2010–2012 that will help inform the IAESB's standard-setting activities.

A call for project proposals is expected to be released in the third quarter of 2010. Winners are expected to be announced in the fourth quarter. The final deliverables from these research projects are expected in the first quarter of 2012.

IFAC SMP Committee Releases Practice Management Guide

IFAC’s Small and Medium Practices (SMP) Committee recently issued the Guide to Practice Management for Small- and Medium-sized Practices, which provides guidance on how this sector can better manage their practices and ultimately operate in a safe, profitable, and professional manner. With practice management principles and best practices on a comprehensive range of topics from strategic planning to managing staff, the publication features case studies to illustrate the concepts, checklists and forms, a list of further readings, and modules that may be used for training and education. The guide was developed with CPA Australia.

The guide can be downloaded free of charge from the SMP section of IFAC's Publications and Resources site: web.ifac.org/publications.

IFAC to Participate in ACCA Global Virtual Conference

The second annual Global Virtual Conference, hosted by the Association of Chartered Certified Accountants (ACCA), will focus on the challenges facing the accountancy profession in rebuilding the global economy. IFAC will have a virtual booth at the event, which will be held on July 28, 2010. Bringing together ACCA members, experts, and other stakeholders, the meeting will provide an online forum for participants on issues currently impacting the accounting profession, such as the future of the global economy, managing finance talent, and new developments in narrative reporting. It will feature live debates as well as previously recorded content that can be accessed through any internet browser. The content will be available for viewing through the end of October 2010.

To register for the conference, email This email address is being protected from spam bots, you need Javascript enabled to view it . More information about the conference is available on the ACCA’s website: www.accaglobal.com.

2010 World Congress of Accountants: Register Now

The 18th World Congress of Accountants, hosted by the Malaysian Institute of Accountants and IFAC, will be held November 8–11, 2010, and will feature the theme Accountants: Sustaining Value Creation. The Congress will offer more than 30 panel discussions and speakers from the World Bank, Transparency International, the Financial Stability Board, the European Commission, the International Forum of Independent Audit Regulators, and the International Accounting Standards Board, among others. Thousands of delegates representing the profession from around the world will attend. Click here to register now: www.wcoa2010kualalumpur.com/registration.html.

IFAC in Focus: Recent IFAC Board Approvals

IFAC Board Approves Recommendations to Assist SMPs

IFAC has approved a set of recommendations designed to expand support to member bodies in their work to assist small and medium practices (SMPs). The recommendations were approved by the IFAC Board at its June 2010 meeting, and are the culmination of a strategic review initiated by the Board at its February 2009 meeting.

The recommendations can be categorized into the following areas:

· Increase the visibility, voice, and profile of SMPs—for example, by communicating and advocating the importance of the SME sector and the role of SMPs in supporting this sector;

· Expand the monitoring of global regulatory reform to ensure its suitability for SMEs and SMPs;

· Develop guidance, resources, and tools—in collaboration with member bodies—that help promote and build the capacity of SMPs to deliver high-quality accounting, assurance, and business advisory services; and

· Enhance the extent and effectiveness of participation of SMPs in the development of IFAC’s standards through increased SMP representation on certain independent standard-setting boards and other activities where SMP contributions are essential.

The strategic review leading to the recommendations was carried out by a task force drawn from the Board, the International Auditing and Assurance Standards Board (IAASB), and the IFAC SMP Committee. The recommendations are the outcome of a consultative process that included an online survey—sent to recognized regional organizations, other accountancy groupings, and all IFAC member bodies—which resulted in responses from a broad cross-section of IFAC stakeholders. In addition, at the IFAC-convened Chief Executives Strategy Forum, over 40 chief executives representing a diverse group of IFAC member bodies discussed the review results and provided suggestions which helped to shape the final recommendations.

While the SMP Committee will play the lead role in implementing the recommendations, and has been given an expanded mandate to do so, contributions from many areas of IFAC, its member bodies, and the independent standard-setting boards will be critical to their successful implementation. IFAC members can make the greatest contribution at this stage of the implementation process by increasing the voice and visibility of their SMP constituencies, seeking greater SMP representation, and sharing resources with IFAC to help with the training and development of SMPs globally. IFAC’s independent standard-setting boards and other groups (such as the PAIB Committee and others) will be encouraged to further embed SMP and SME considerations into their work programs—for example, through increased involvement of SMPs in projects and by adopting a “think small first” approach to tackling complexity.

For more information on the activities of the SMP Committee, including a variety of free publications and resources, please visit the International Center for SMPs at www.ifac.org/smp.

IFAC Board Approves Recommendations to Better Support Professional Accountancy Organizations

IFAC has approved a set of important recommendations designed to expand support and assistance in the development of Professional Accountancy Organizations (PAOs) throughout the world. The recommendations are the culmination of a regular triennial review of the Developing Nations Committee’s (DNC) structure, activities, and effectiveness.

Currently, IFAC helps establish, strengthen, and advocate for PAOs that are, or are aspiring to become, IFAC members or associates. IFAC also helps governments and other stakeholders that seek to develop such organizations within their jurisdictions. However, the DNC recognized that approximately 60 percent of IFAC members and associates operate in developing nations, where capacity and resource constraints make it difficult to establish effective financial legislative frameworks, design strong education and certification programs, and develop competent and capable accountancy professionals able to meet the needs of government and the marketplace. This can contribute to poor-quality financial reporting, lack of transparency and confidence in the financial markets, and limited foreign direct investment and economic growth. Better addressing the needs of these organizations is critical for improving the profession around the world as well as strengthening the global financial system.

From autumn 2009 until spring 2010, the DNC Review Task Force solicited input from member bodies, IFAC Recognized Regional Organizations and Acknowledged Accountancy Groupings, the donor community, PAO Chief Executives, IFAC Board Members, IFAC staff, and other relevant stakeholders through online surveys, structured interviews, and formal group discussions. Analysis of this extensive feedback and data yielded a formal report supporting the implementation of 13 recommendations to improve and strengthen the DNC and better respond to the needs of developing countries.

These findings and recommendations—including the renaming, and refocusing, of the DNC to the Professional Accountancy Organization Development Committee (PAODC)—were presented during the June 2010 IFAC Board meeting. The recommendations reflect the Task Force’s findings, and are intended to concentrate the DNC’s activities on one of the most pressing needs among existing and potential IFAC members and associates: support and assistance for the development of professional accountancy organizations.

The recommendations to refocus the PAODC (formerly DNC) activities included:

· Renaming the DNC to the PAODC in order to better reflect its focus and communicate its purpose to external stakeholders;

· Placing more emphasis on activities that directly support the development of PAOs, through the provision of tools and guidance, advocacy, and outreach;

· Increasing the emphasis on communication of the needs of PAOs and the tools and guidance developed by the committee, including translation of these resources to ensure they reach relevant stakeholders; and

· Continuing to strengthen advocacy and build awareness within the donor community by developing a strategy to improve coordination of activities and messaging.

IFAC is currently preparing a work plan for the PAODC, as well as for the Member Body Compliance Program, that will assess the resource requirements for maintaining existing service levels as well effectively implementing the full recommendations of the Task Force. Implementing these recommendations will result in a committee that will liaise more with donor groups and be more engaged with PAOs in a number of different ways, such as developing mentoring relationships and regional events.

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In This Issue:
1) IFAC Launches Survey on International Alignment of Risk Management and Internal Control Guidelines
2) Views Sought on IFAC's 2010-2012 Strategy and Work Plan to Serve Professional Accountants in Business
3) Recommendations to Improve Business Reporting from Key Business Leaders Now Available
4) IFAC and A4S Collaborate to Promote Sustainable Organizations
5) IFAC Sustainability Framework to be Updated
6) Other Sustainability News from Around the World
7) IFAC Releases 2009 Annual Report
8) Share PAIB eNews With Your Colleagues

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1) IFAC Launches Survey on International Alignment of Risk Management and Internal Control Guidelines

The PAIB Committee, with the assistance of the Committee of Sponsoring Organizations (COSO), has launched a survey to assess the need for international alignment of risk management and internal control guidelines.

Through this survey, the PAIB Committee seeks to:

Investigate how risk management and internal control frameworks, standards and/or guidance are used around the globe;
Identify the strengths and weaknesses of existing risk management and internal control systems; and
Determine the need for international alignment among the various national frameworks, standards and guidance that already exist in this area.
The survey will be open until July 10, 2010. It is available online and can be accessed here. We encourage you to share this survey, which only takes about 20 minutes to complete, with your colleagues.

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2) Views Sought on IFAC's 2010-2012 Strategy and Work Plan to Serve Professional Accountants in Business

IFAC has released for comment the exposure draft (ED) Professional Accountants in Business Strategy and Work Plan for 2010-2012. This public consultation document, prepared by the PAIB Committee, offers IFAC member bodies and other key stakeholders an opportunity to comment on the proposed vision, strategic direction and corresponding work plan for this key constituency for the first time.

The proposed strategy focuses on enhancing the profile, influence, and relevance of professional accountants in business. It also identifies two key objectives:

Increase awareness of the important roles professional accountants play in creating, enabling, preserving, and reporting value for organizations and their stakeholders; and
Support the professional accountants in business within IFAC member bodies by facilitating the communication and sharing of good practices and ideas.
The comment period is open until July 14, 2010.

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3) Recommendations to Improve Business Reporting from Key Business Leaders Now Available

IFAC has started issuing a series of articles on business reporting. The articles are based upon interviews with 25 key business leaders from the around the world, featuring their practical recommendations for improving corporate governance, business reporting, and auditing in the aftermath of the financial crisis. The articles will be posted on the IFAC website and will link to the full interviews.

IFAC plans to issue the articles and interviews over the next months. We encourage you to read the interviews, review the recommendations, and provide comments. Building upon the interview recommendations and the subsequent reader input, IFAC will develop an overall conclusion article, an action plan, and a principles-based International Good Practice Guidance, Evaluating and Improving Business Reporting in Organizations.

The first of these articles, together with the underlying interviews, can be found on this web link.

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4) IFAC and A4S Collaborate to Promote Sustainable Organizations

IFAC and The Prince's Accounting for Sustainability (A4S) Project have entered into a memorandum of understanding to support the global accountancy profession's role in developing sustainable organizations. IFAC and A4S will work together on initiatives to help professional accountants embed sustainable practices into their organizations.

Key priorities of this collaboration include:

Raising awareness of sustainability issues and facilitating sharing and collaboration across the global accountancy community, primarily through the development of a community website, which is currently under development;
Establishing an international integrated reporting committee to develop a new reporting model that will better reflect the interconnected impact of financial, environmental, social, and governance factors on the long-term performance and condition of an organization; and
Incorporating accounting for sustainability within professional training and education.

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5) IFAC Sustainability Framework to be Updated

The IFAC Sustainability Framework, launched in 2009, is being updated to reflect the latest developments in the field. To make any suggestions for these updates, including the addition of any new issues or good practice examples, please contact Stathis Gould, at This email address is being protected from spam bots, you need Javascript enabled to view it .

The framework provides guidance on how to inject sustainability leadership into the management cycle, from making and executing strategic decisions to reporting on performance to stakeholders. It will continue to highlight the issues that organizations must address to make sustainability an integral element in their business models. The framework will also be available as a virtual paper later in 2010.

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6) Other Sustainability News from Around the World

Member Bodies

a. Association of Chartered Certified Accountants
The ACCA Pakistan and the World Wildlife Fund (WWF) hosted an event to mark Earth Day that featured debates on current trends in sustainability and the evolving nature of business reporting.

b. American Institute of Certified Public Accountants
The AICPA has updated the content of its Sustainability News web page, including the addition of an MIT Sloan article The Change Leadership Sustainability Demands.

c. Canadian Institute of Chartered Accountants
The CICA is now accepting entries for an expanded version of the Corporate Reporting Awards. Included in this competition will be an award for sustainable development reporting.

d. Chartered Institute of Management Accountants
The CIMA has published a case study examining the sustainability strategy of Australian bank Westpac. The study provides insights into the ways that management accountants help develop, implement, and communicate a corporate sustainability strategy. Further, CIMA has released the results of a survey, conducted jointly with the Prince's Accounting for Sustainability Project, which examines how financial professionals can help their organizations mitigate and adapt to climate change. This project was nominated for a Globe Sustainability Award.

e. Chartered Institute of Public Finance and Accounting
The CIPFA has established the CIPFA Carbon Finance Network - a subscription service giving members access to a variety of resources addressing the subjects of climate change and greenhouse gas emissions, in particular how these issues impact public sector finance. In addition, CIPFA's sustainability web pages have been updated.

f. CPA Australia
CPA Australia has published its second GRI-based sustainability report. The organization has also published the first of a three-part research project on current and future developments in non-financial information disclosure: Corporate non-financial reporting processes: An analysis of the emerging modes by which organisations engage with their stakeholders. Parts two and three, on sustainability report assurance practices and corporate water reporting, are expected to be released in June.

g. South African Institute of Chartered Accountants
SAICA operates and regularly updates an information hub for business users: www.sustainabilitysa.org. The primary focus is on sustainability reporting, while continuing to raise further awareness of sustainability issues among its members.

International Organizations

a. McKinsey & Company
McKinsey has published the results of a global survey on how companies manage sustainability. In the survey, more than half of the executives polled considered sustainability to be "very" or "extremely" important as a management issue, but only 30 percent were actively addressing the issue.

b. Securities and Exchange Commission
In an announcement, the SEC said that it has approved interpretive guidance on climate change disclosures. The guidance clarifies what publicly-traded companies need to disclose to investors in terms of climate-related material effects on business operations.

c. The Sustainability Consortium
Over 50 major companies and other organizations from around the globe have joined together to establish the Sustainability Consortium, which promotes sustainability in all stages of the development and marketing of consumer products. Wal-Mart supported the establishment of the not-for-profit Consortium and Safeway recently announced it was joining this group. Other Consortium members include BASF, The Walt Disney Company and Cargill.

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7) IFAC Releases 2009 Annual Report

IFAC has recently released its annual report for 2009. This document highlights IFAC's response to the global financial crisis as well as initiatives that have positioned the organization as a more influential voice for the global accountancy profession.

Featuring messages from IFAC President Robert Bunting, Chief Executive Officer Ian Ball, and Public Interest Oversight Board Chairman Stavros Thomadakis, the annual report provides a detailed account of all the services delivered by IFAC in 2009.

The annual report, which was developed digitally for the first time this year, also provides noteworthy interactive features such as "The Year at IFAC," a timeline that captures significant events and accomplishments in 2009, and "Structure, Oversight, and Consultation," a chart depicting IFAC's governance structure and an overview of its oversight and consultation processes.

You can access the annual report here.

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8) Share PAIB eNews with Your Colleagues

The PAIB issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and let them know that they can subscribe to this and other eNews bulletins at the eNews sign-up page at www.ifac.org/e-news.

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ACCOUNTANTS: SUSTAINING VALUE CREATION

The 18th World Congress of Accountants, hosted by the Malaysian Institute of Accountants and IFAC, is November 8-11, 2010. The Congress will offer more than thirty panel discussions and speakers from The World Bank, Transparency International, the Financial Stability Board, the European Commission, IFIAR, and the IASB, among others. Thousands of delegates representing the profession from around the world will attend.

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In this issue:
1) IAESB Issues 2010-2012 Strategy and Work Plan
2) Consultation for IES Revision Projects
3) IAESB to Release Information Paper on Assessment Guidance
4) Draft Guidance for Professional Skills & General Education Considered
5) IAAER/ACCA 2010-2012 Research Program
6) IFAC Releases 2009 Annual Report
7) Share IAESB eNews with Your Colleagues

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1) IAESB Issues 2010-2012 Strategy and Work Plan

The IAESB has issued its 2010-2012 Strategy and Work Plan, which focuses on enhancing International Education Standards (IESs), providing guidance for the adoption and implementation of these standards, and improving communication with stakeholders interested in accountancy education. The plan was issued following approval of its content by the IAESB at its February 2010 meeting, as well as approval of due process activities by the Public Interest Oversight Board (PIOB) at its March 2010 meeting.

The plan sets the direction and priorities for all IAESB projects and activities during the three-year period that started in January 2010.

The redrafting and revision of the IAESB's eight education standards builds upon the work of two important projects that were completed during the board's previous three-year work period: the Framework for International Education Standards for Professional Accountants (the Framework) and the "IAESB Drafting Conventions" (the Drafting Conventions). The Framework establishes a common set of accounting education concepts to improve consistency in all IAESB standards, while the Drafting Conventions set out a new structure for writing these standards to improve their clarity and readability. These initiatives will enable member bodies and other education stakeholders to understand more clearly their roles and responsibilities in the training and development of accounting professionals. The redrafting and revision project is scheduled for completion by the fourth quarter of 2012.

To promote the global adoption of these standards, the IAESB plans to continue work on a series of projects related to their successful implementation. These projects include developing information papers and practice statements that will provide examples of "good practice" in implementing IES 3, Professional Skills and General Education, and guidance on implementing IES 8, Competence Requirements for Audit Professionals.

To increase awareness of its initiatives, the IAESB is developing a formal communications plan to reach out beyond IFAC member bodies to other stakeholders such as academics, regulators and employers.

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2) Consultation for IES Revision Projects

The IAESB has released A Consultation Paper on the Revision of International Education Standard 8: Competence Requirements for Audit Professionals seeking views on a number of specific issues related to the IAESB's planned revision of International Education Standard (IES) 8, Competence Requirements for Audit Professionals. The views collected by this paper will also be used in the development of implementation guidance for this standard. Comment for this paper is requested by June 15, 2010 and can be submitted via the link above.

Targeted consultation has also been conducted by IAESB revision task forces addressing the revision of other IESs from February to May 2010. The IES revision and redrafting project has three goals:

Improving the clarity of these standards
Ensuring their consistency with the concepts outlined in the revised Framework for International Education Standards for Professional Accountants
Clarifying issues that have emerged due to changes in the accounting education environment as well as from the experience gained by IFAC member bodies as they implement IESs
The IAESB started reviewing the findings of the targeted consultation at its May 2010 meeting and will continue during its November 2010 meeting.

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3) IAESB to Release Information Paper on Assessment Guidance

The IAESB has approved the release of an International Education Information Paper that will help guide IFAC member bodies in their implementation of IES 6, Assessment of Professional Capabilities and Competence.

IES 6 outlines the requirements for the final assessment of a candidate's professional capabilities and competence (including professional knowledge, skills and values) before qualification. The Information Paper identifies the major issues that should be considered in developing and administering a final written examination, and provides examples of policies and procedures that can be used to address these issues. It can be applied to the administration of a summative, "high stakes" examination that leads to qualification for membership in a member body. Many of the issues identified in this paper may also be appropriate for written examinations that are offered as part of a series of examinations that lead to membership qualification.

The information paper also includes examples of "good practice" in the areas of developing, marking and administering a final examination required for qualification as a professional accountant.

The paper is expected to be released in July 2010.

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4) Draft Guidance for Professional Skills & General Education Considered

During its May meeting in Copenhagen, the IAESB considered a revised draft of an information paper designed to provide guidance for member bodies implementing IES 3, Professional Skills and General Education.

This standard describes the mix of skills needed for a candidate to qualify as a professional accountant. It also shows how a general education, gained in a variety of ways and within different contexts, can contribute to the development of these skills. The information paper provides examples of "good practice" in identifying and assessing professional skills at the point of qualification and during an accountant's career. During the May meeting, the IAESB provided direction to a task force regarding the presentation of examples in the information paper.

The task force will prepare a final draft of the information paper for discussion, with the aim of obtaining approval for publication, during the IAESB's November 2010 meeting.

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5) IAAER/ACCA 2010-2012 Research Program

The International Association for Accounting Education & Research (IAAER) and the Association of Chartered Certified Accountants (ACCA) are planning to fund a research program for 2010-2012 that will help inform the IAESB's standard-setting activities.

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6) IFAC Releases 2009 Annual Report

The annual report, which was developed digitally for the first time this year, also provides noteworthy interactive features such as "The Year at IFAC," a timeline that captures significant events and accomplishments in 2009, and "Structure, Oversight, and Consultation" section, a chart depicting IFAC's governance structure and an overview of its oversight and consultation processes.

You can access the annual report here.

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7) Share IAESB eNews with Your Colleagues

The IAESB issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and let them know that they can subscribe to this and other eNews bulletins at the eNews sign-up page at www.ifac.org/e-news.

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IFAC Seeks Views on Its 2010-2012 Strategy and Work Plan to Serve Professional Accountants in Business

(New York/May 17, 2010) – IFAC today released for comment an exposure draft (ED) setting out its proposed 2010-2012 strategy and work plan prepared by its Professional Accountants in Business (PAIB) Committee.

The proposed plan outlines the direction and priorities of IFAC’s services relevant to professional accountants in business. This public consultation is a first-time opportunity for IFAC member bodies and other key stakeholders to comment on the proposed vision, strategic direction, and corresponding work plan for this key constituency.

The proposed strategic direction focuses on enhancing the profile, influence, and relevance of professional accountants in business and identifies two specific objectives:

1. Increasing awareness of the important roles professional accountants play in creating, enabling, preserving, and reporting value for organizations and their stakeholders; and

2. Supporting the professional accountants in business within IFAC member bodies by facilitating the communication and sharing of good practices and ideas.

"Well over half of the total number of professional accountants is within enterprises, and these professional accountants in business play a wide range of roles,” said PAIB Committee Chair Roger Tabor. “The proposed strategic direction provides a basis for IFAC to determine how best to serve this large, diverse constituency at a global level.”

How to Comment

To access the exposure draft or submit a comment, please visit www.ifac.org/PAIB/ExposureDrafts.php. Comments on the exposure draft are requested by July 14, 2010.
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IPSASB PUBLISHES 2010 HANDBOOK OF PRONOUNCEMENTS

(New York/May 6, 2010) - The International Public Sector Accounting Standards Board (IPSASB) published today its 2010 Handbook of International Public Sector Accounting Pronouncements. In two volumes, the handbook contains all current IPSASB pronouncements, including 31 accrual-based standards and the IPSASB’s cash basis standard. Five of these standards were approved by the IPSASB in 2009, including requirements and guidance for all aspects of accounting for financial instruments, as well as intangible assets and agriculture.

“The handbook represents the substantial completion of the IPSASB’s convergence program and over a decade of work,” said IPSASB Chair Andreas Bergmann. “It provides the only global and comprehensive set of accounting requirements and guidance developed specifically for preparers of public sector financial statements. It is also a strong foundation for the next phase of the IPSASB’s work, including developing the IPSASB’s Conceptual Framework— a set of principles that, following completion, will underpin the IPSASB’s standard-setting activities for the long-term—and maintaining alignment with the International Accounting Standards Board’s International Financial Reporting Standards (IFRSs).”

Under the convergence program, the IPSASB achieved substantial convergence with the IFRS requirements as of December 31, 2008, that are relevant for the public sector.

How to Order

The handbook can be downloaded free of charge in PDF format or ordered in print from IFAC's Publications and Resources site: web.ifac.org/publications. Print copies of parts I and II of the handbook are available as a three-piece boxed set with the Handbook of the Code of Ethics for Professional Accountants. The boxed set is being offered free of charge, however shipping and handling charges apply. Orders can also be placed by calling IFAC at +1 (212) 471-8722.

The IPSASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to members and employees.

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In This Issue:
1. IAASB Meetings
2. Open for Comment - Questionnaire on the IAASB's 2012-2014 Strategy and Work Program
3. Open for Comment - Exposure Draft of ISAE 3420, Assurance Reports on the Process to Compile Pro Forma Financial Information Included in a Prospectus
4. Of Interest to Small and Medium Practitioners (SMPs) - IAASB Progresses Revisions of Review and Compilation Standards
5. Recently Issued Publications
6. Share IAASB eNews with Your Colleagues

1. IAASB Meetings

The most recent IAASB meeting was held on March 15-19, 2010 in New York.

In addition to the projects discussed in this eNews, the IAASB deliberated issues relating to the following projects:

Revision of International Standard on Auditing (ISA) 610, Using the Work of Internal Auditors
Revision of ISA 720, The Auditor's Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements
Revision of International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information
Revision of International Auditing Practice Statement (IAPS) 1012, Auditing Complex Financial Instruments
Development of ISAE 3410, Assurance on a Greenhouse Gas Statement

The IAASB will meet via teleconference on May 11, 2010 and in Mainz, Germany on June 14-18, 2010. As a reminder, all meeting agenda materials are publicly available posted on the IAASB's website in advance of the meetings and audit recordings are posted after the meetings. Visit www.iaasb.org/Meetings.php.

2. Open for Comment - Questionnaire on the IAASB's 2012-2014 Strategy and Work Program

The IAASB has launched an online questionnaire to inform the development of its strategic direction and related work program for 2012-2014.

The questionnaire serves as the first stage of the IAASB's 18-month consultation process. Through the survey, the board seeks feedback on the challenges facing the accountancy profession; the IAASB's current strategic focus on the development, adoption, and implementation of standards; the needs of small-and medium-sized practices (SMPs) and small-and medium-sized entities (SMEs); and current and future projects, among other topics.

The results of the questionnaire will be used to develop a formal Consultation Paper on the IAASB's future strategy and work program, to be issued in December 2010.

Responses to the online questionnaire are requested by May 14, 2010.

3. Open for Comment - Exposure Draft of ISAE 3420, Assurance Reports on the Process to Compile Pro Forma Financial Information Included in a Prospectus

At its March 2010 meeting, the IAASB approved for exposure proposed ISAE 3420, Assurance Reports on the Process to Compile Pro Forma Financial Information Included in a Prospectus. The proposed standard deals with the practitioner's responsibilities to report on the process of compiling pro forma financial information for inclusion in an issuer's prospectus.

The proposed standard responds to calls from stakeholders for common standards of reporting in relation to issuers' financial information included in prospectuses. This is particularly relevant in light of the growing number of cross-border securities offerings and the globalization of capital markets. The proposed new standard is aimed at promoting the development and convergence of market practice around the world by establishing clear, globally accepted benchmarks for the performance of such engagements.

Comments should be submitted using the online comment system by September 30, 2010.

4. Of Interest to Small and Medium Practitioners (SMPs) - IAASB Progresses Revisions of Review and Compilation Standards

The IAASB continues to make progress in developing international engagement standards for financial statement services other than audits.

Placing high priority on further addressing the needs of SMEs, as a first step the IAASB has focused its efforts on revising two existing standards:

International Standard on Related Services (ISRS) 4410, Engagements to Compile Financial Statements; and
International Standard on Review Engagements (ISRE) 2400, Engagements to Review Financial Statements.

This strategic focus recognizes that the IAASB plays a leading role in exploring standards for a range of services other than the financial statement audit that may be appropriate for SMEs. While such entities may seek to have audits on a voluntary basis, and the users of their financial statements (such as lending institutions) may request that audits be performed, the implication is clear-there is a market demand for services that meet the unique needs of SMEs and the users of their financial information.

The IAASB discussed the project at its March meeting and will further deliberate the issues at its June and September 2010 meetings. While significant deliberations still remain over the next several months, the IAASB is on schedule to issue proposed standards for public comment by the last quarter of 2010.

A Staff Update, which provides more details on the project, can be accessed at www.ifac.org/IAASB/ProjectHistory.php?ProjID=0096.

5. Recently Issued Publications

The IAASB has released its 2009 annual report, which highlights the completion of the landmark Clarity Project to redraft the ISAs, the development of adoption and implementation resources for the ISAs, and the launch of innovative new projects to address emerging issues.

Public input is essential to ensuring that the IAASB has insights on the different perspectives of international regulators and organizations, national auditing standard setters, practitioners, academia, and other stakeholders. The report outlines all of the outreach activities that the IAASB participated in during 2009. These activities demonstrate the board's commitment to actively engaging with its stakeholders.

IFAC has also recently released the 2010 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements and the 2010 Handbook of the Code of Ethics for Professional Accountants.

The handbooks can be downloaded free of charge in PDF format or purchased in print from IFAC's Publications and Resources site: web.ifac.org/publications.

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IFAC and The Prince’s Accounting for Sustainability Project Collaborate to Promote Sustainable Organizations

(New York/May 4, 2010) – The International Federation of Accountants (IFAC) and The Prince’s Accounting for Sustainability (A4S) Project have entered into a memorandum of understanding to support the global accountancy profession’s role in developing sustainable organizations.

Organizations are increasingly seeking new ways to maintain their economic performance and contributions to society in the face of challenge and crisis. Perhaps the most critical challenge facing business and society generally is to live within our ecological limits, while continuing to enjoy economic prosperity. IFAC and A4S believe that an essential part of the answer lies in going beyond traditional ways of thinking about performance and embedding sustainability into strategy, governance, performance management, and reporting processes.

Key priorities to support the work of professional accountants in embedding sustainable practices include:

· Raising awareness and facilitating sharing and collaboration across the global accountancy community, for example, through the development of a community website for professional accountancy organizations, business leaders, academics, and other experts to exchange ideas and share good sustainability practice;

· Establishing an international integrated reporting committee to develop a new reporting model that will better reflect the interconnected impact of financial, environmental, social, and governance factors on the long-term performance and condition of an organization; and

· Incorporating accounting for sustainability within professional training and education.

Professional accountants in organizations support the sustainability efforts of the organizations they work for in leadership roles in strategy, governance, performance management, and reporting processes. They also oversee, measure, control, and communicate the long-term sustainable value creation of their organizations.

Paul Druckman, Chairman of the A4S Executive Board, states, “We will only be able to achieve a sustainable future if all organizations, and all individuals within those organizations, recognize the role that they can and need to play. Effective action by the accounting and finance community to better account for sustainability is an essential part of the response. The collaboration between IFAC and A4S will help to make this a reality.”

"Professional accountants play a vital role in helping to create sustainable organizations and markets, especially in the areas of accountability and measurement of results," says Robert Bunting, President of IFAC. "I am delighted that our two organizations are working together to advance the role of sustainability leadership and reporting at a global level, fostering collaboration with key stakeholders and developing best practices for integrating sustainability issues in the way we do business."

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In this Issue:

1. IESBA Seeks Comment on Proposed Strategy and Work Plan for 2010-2012
2. Adoption and Implementation Material Available
3. IESBA Convergence Objective
4. 2010 Ethics Handbook Available in Print and Electronic Formats
5. Upcoming Meetings
6. Share Ethics eNews with Your Colleagues

1. IESBA Seeks Comment on Proposed Strategy and Work Plan for 2010-2012

The IESBA has released an exposure draft of its proposed Strategy and Work Plan 2010-2012. This plan focuses on proposed new projects and activities that the board will undertake over the next three years.

In the draft 2010-2012 plan, the IESBA states that it intends to continue work and complete two projects that had been a high priority in the previous work plan:

Conflicts of Interest - The IESBA will reconsider the nature and extent of the guidance in the Code of Ethics for Professional Accountants (the Code) on conflicts of interest and revise Sections 220 Conflicts of Interest and 310 Potential Conflicts as appropriate; and
Responding to Fraud or Illegal Acts - The IESBA will reconsider the nature and extent of the guidance currently in the Code on how professional accountants should respond in situations where they encounter a suspected fraud or illegal act. The board will then revise the Code as appropriate.

The IESBA also intends to commence a project that will consider which entities should be considered to be a "related entity" of a collective investment vehicle, including mutual funds, and whether the existing definition of related entity should be revised when applied to collective investment vehicles.

In addition to its standard-setting activities, the IESBA plans to continue to assess its activities supporting those professionals, organizations and other stakeholders who are working to adopt and implement the revised Code. The board will consider whether additional support materials and activities would be useful.

The plan also outlines intended activities related to the IESBA's convergence objective.

Comments are due on June 15, 2010. To access the exposure draft, visit: http://www.ifac.org/Guidance/EXD-Details.php?EDID=0137.

2. Adoption and Implementation Material Available

The IESBA staff has prepared materials to support the adoption and implementation of the Code of Ethics for Professional Accountants (the Code).

These materials include:

PowerPoint presentations that can be used to explain the content of the Code;
Comparisons of the revised Code with the previous Code;
A template that can assist individuals in understanding how the provisions in a particular jurisdiction compare to the Code, and
An overview of the independence requirements in the Code.

The IESBA will continue to assess what additional material or activities would be useful to further the adoption and implementation of the Code.

The adoption and implementation support materials are available at http://www.ifac.org/Ethics/Resources.php#implementation-and-adoption.

3. IESBA Convergence Objective

Promoting international convergence of independence requirements for accountancy professionals is a major priority for the IESBA. To that end, the IESBA will liaise closely with national standard setters and regulators to identify and understand their perspectives on convergence, and to obtain their views on how the Code can be used as a catalyst to achieve greater convergence. In particular, the IESBA will be seeking input on:

(a) Whether in a group audit situation, where the national independence standards in the jurisdiction of the parent auditor contain requirements that are more stringent than those contained in the Code, the parent auditor would accept foreign auditors of foreign subsidiaries complying with the independence requirements in the Code; and
(b) The types of improvements to the Code that standard setters and regulators believe should be made in order for the Code to gain acceptance and recognition in their jurisdictions. The IESBA will consider input it has received from stakeholders, such as the need to identify more clearly the independence provisions related to public interest entities. Accordingly, it will prepare a document identifying those provisions, which it will use in discussions with national standard setters and regulators.

4. 2010 Ethics Handbook Available in Print and Electronic Formats

The 2010 edition of the Handbook of the Code of Ethics for Professional Accountants is now available for download free-of-charge from IFAC's Publications and Resources site (web.ifac.org/publications). Print copies of the handbook, together with the Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, can be ordered for US $185.00 plus shipping by calling IFAC at +1 (212) 471-8722.

5. Upcoming Meetings

The IESBA next meets on June 23-24, 2010 in Paris, France. For more information and to register to attend an IESBA meeting as a public observer, visit: http://www.ifac.org/Ethics/Meetings.php.

Meetings of the IESBA Consultative Advisory Group are also open to public observers. Its next meeting will be held on September 13, 2010 in London, United Kingdom. For more information, visit: http://www.ifac.org/Ethics/ConsultativeAdvisoryGroup.php.

6. Share Ethics eNews with Your Colleagues

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

1. Go to the eNews sign-up page at http://www.ifac.org/E-news/index.tmpl.
2. Enter your email address, first name, last name and country.
3. Select "Ethics eNews" from the check list, as well as any other electronic newsletters that you would like to receive.

You will receive the next issue of the IESBA eNews directly to your inbox.

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IAASB Proposes New Standard to Strengthen Reporting on Pro Forma Financial Information in Prospectuses

(New York/April 28, 2010) – The International Auditing and Assurance Standards Board (IAASB) today released a proposed new assurance standard that addresses the process of compiling pro forma financial information included in prospectuses. Recognizing the increasingly integrated nature of global capital markets and the importance of pro forma financial information in the public’s investment decisions, the newly proposed standard is designed to enhance public confidence in how such financial information is produced.

The proposed standard, Assurance Reports on the Process to Compile Pro Forma Financial Information Included in a Prospectus, deals with information—necessary in many forms of domestic and cross-border securities offerings—that illustrates the impact of an event or transaction on an issuer’s financial information. It provides comprehensive guidance on the nature and extent of a practitioner’s work when reporting on whether the process of compiling pro forma financial information has been properly followed. It also covers related engagement acceptance and reporting considerations, and provides an illustrative report arising from such an engagement.

“Our research indicates that many jurisdictions around the world need a common, high-quality standard that can be consistently, globally applied. Our goal, therefore, is to guide and contribute to the quality of practice in an area of great importance to capital markets,” said Arnold Schilder, Chairman of the IAASB.

While all stakeholders are invited to comment on the proposed ISAE 3420, the IAASB recognizes that pro forma financial information is of particular interest and relevance to issuers, investors, analysts, professionals working at securities exchanges, and regulators. Accordingly, the IAASB invites respondents from these constituencies in particular to comment on the proposal, including the content of the illustrative practitioner’s report.

“Internationally, investors, regulators, and other stakeholders want and expect consistent, quality work by assurance practitioners, as well as clear and understandable reporting. Over the years, however, different countries have developed different practices in relation to reporting on the process of compiling this type of information, and this is a situation that is not sustainable in the public interest,” noted James Gunn, IAASB Technical Director. “The proposed standard seeks to address this issue by helping to create a level playing field for practitioners for such engagements, thereby enabling them to better meet the expectations of investors, regulators, and others.”

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IPSASB Publishes Proposals for Amendments under its Annual Improvements Project

(New York/April 23, 2010) - The International Public Sector Accounting Standards Board (IPSASB) today released for comment exposure draft (ED) 44, Improvements to International Public Sector Accounting Standards (IPSASs).

The release continues the IPSASB’s improvements project, an annual undertaking intended to enhance the usability of IPSASs and thus facilitate global convergence. The IPSASB uses the improvements project to make non-urgent but necessary amendments to IPSASs.

ED 44 includes proposed improvements to existing IPSASs to maintain alignment with International Financial Reporting Standards (IFRSs), as well as other general improvements. The proposed amendments are related primarily to requirements for recognition, measurement, and disclosure and do not represent substantive revisions to the content of existing standards.

"Financial reporting in the public sector is dynamic," said Andreas Bergmann, IPSASB Chair. “The IPSASB must continually reassess the IPSASs to ensure that they are relevant and up to date and that they are easy to use by preparers of public sector financial statements."

How to Comment

To access the exposure draft or submit a comment, visit the IFAC website at www.ifac.org/Guidance/EXD-Outstanding.php. Comments on the exposure draft are requested by June 30, 2010.

The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this exposure draft to their members and employees

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IAASB Annual Report Highlights Implementation and Assurance Developments

(New York/April 15, 2010) – The International Auditing and Assurance Standards Board (IAASB) today released its 2009 annual report. The report highlights the completion of the landmark Clarity Project surrounding the IAASB’s International Standards on Auditing (ISAs), the development of adoption and implementation resources for the ISAs, and the launch of innovative new projects to address emerging issues.

“During a period of great financial instability and uncertainty, auditors and assurance practitioners faced significant challenges. By seeking public input, responding to emerging needs, and supporting the implementation of global standards, the work of the IAASB continued to contribute to the restoration and maintenance of public confidence in information used for decision making,” said IAASB Chairman Arnold Schilder. “This has required diligent adherence by the IAASB to its public interest mandate, which is now entrenched in how the IAASB operates.”

This first year of the IAASB’s 2009-2011 strategy and work program saw the IAASB produce a range of tools and resources to assist auditors in implementing the now-effective suite of Clarified ISAs. Recognizing the significant demand from auditors and preparers for additional guidance in light of the financial crisis, this work program included a project to develop guidance on auditing complex financial instruments. The year 2009 also marked an important transition to new projects to address a wide range of information needs, such as greenhouse gas emissions, pro forma financial information included in prospectuses, controls at service organizations, and XBRL. The board’s standard-setting efforts to address the needs of small- and medium-sized entities, and those who provide services to them, were also progressed in 2009 with the initial steps to update and revise the IAASB’s standards addressing review and compilation engagements.

Incorporating public input is essential to ensuring that the IAASB has insights to the different perspectives of international regulators and organizations, national auditing standard setters, practitioners, academia, and other stakeholders. Its commitment to active engagement with stakeholders is reflected in the various outreach activities described in the report that the IAASB participated in during 2009.

The annual report includes a report from the Chairman of the IAASB Consultative Advisory Group on the work of the group in providing input to the IAASB. The IAASB also continues to receive oversight from the Public Interest Oversight Board.

The report notes some of the issues the IAASB will address in the coming years, including those arising from today’s global economic crisis. To further inform its work program, the IAASB has released an online questionnaire and invites comment on where the IAASB should focus its efforts during 2012-2014.

The 2009 IAASB annual report can be downloaded from "www.ifac.org" claiming to be www.iaasb.org/Resources.php#AnnualReports. Readers are also encouraged to visit the new Clarity Center on the IAASB website (web.ifac.org/clarity-center/index) for more information on the Clarity Project and the full suite of standards that came into effect for audits of financial statements for periods beginning on or after December 15, 2009.

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IFAC ANALYSIS HIGHLIGHTS the Expanding Role of SMPs in Advising SME Clients

(New York/April 13, 2010) – The Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) published an analysis of research on business advisory services provided by SMPs. The extensive analysis includes a review of global research spanning academic studies, practitioner surveys, and interviews of SMP partners.

The analysis suggests that the needs of small- and medium-sized enterprises (SMEs)–—the sector commonly served by SMPs—are changing due to an increasingly complex regulatory environment. The needs of SMEs are also changing as their demands shift from the use of SMPs for statutory audit requirements to business advisory services, including forming business plans and financial forecasts, identifying and managing risk, information technology, and business valuation.

Although the number and variety of SMEs continue to expand, evidence suggests that SMEs have difficulty obtaining access to credit and other resources. The analysis shows that SMPs are well-equipped to expand their services to meet the increasing needs of SMEs. The findings highlight that an important way for SMPS to improve their ability to meet these needs is by building referral networks, allowing them to expand the expertise available to their clients. The research suggests that referral networks are currently being underutilized by SMPs.

IFAC SMP Committee Chair Sylvie Voghel, an SME owner-manager herself, commented, “This research, which noted competency, trust and proximity to their clients as key factors underpinning a strong SMP-SME relationship, is an important step in the committee’s initiative to learn how SMPs can position and equip themselves to better support SMEs.”

The results of the research analysis are presented in the information paper, The Role of Small and Medium Practices in Providing Business Support to Small- and Medium-sized Enterprises, available in the SMP section of IFAC’s Publications and Resources site: web.ifac.org/publications. For more information, the IFAC SMP Committee welcomes readers to visit its International Center for Small and Medium Practices at www.ifac.org/smp, which hosts a collection of relevant links to free resources, including a category devoted to business advisory services. Readers are also encouraged to participate in the SMP/SME Discussion Board, where they may submit their views on the information paper and other issues.

(New York/April 7, 2010) – The International Accounting Education Standards Board (IAESB) has issued its Strategy and Work Plan for 2010-2012, which focuses on enhancing the International Education Standards (IESs) and providing guidance for IES adoption and implementation. This work will assist IFAC member bodies, regulators, employers, academics, and students by prescribing principles for the learning and development of a professional accountant.

"By continuing to enhance standards in international accounting education, we are contributing to the reliability of financial reporting," said Mark Allison, IAESB Chair. "The principle aim of the IAESB 2010-2012 Strategy and Work Plan is to clarify the obligations of those who are involved in the education, assessment, and development of professional accountants.”

The focus of IAESB activities will be on the following:

· Revising the IESs in consideration of the IAESB’s drafting conventions project, which compiled stakeholder feedback on improving the clarity of the standards;

· Developing implementation guidance for the measurable implementation of the IESs, competency frameworks, and quality control measures for education providers; and

· Promoting greater awareness among academics, regulators, and others of the IAESB’s pronouncements and its role in advancing international debate on emerging issues relating to the development and assessment of professional accountants.

The direction of further 2010-2012 activities will be based on the results of these three high-priority projects.

The IAESB 2010-2012 Strategy and Work Plan can be downloaded free of charge from the Resources section of the IAESB site: www.ifac.org/education.

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IFAC Releases 2010 Handbooks containing all iaasb pronouncements and the Code of Ethics for Professional Accountants

(New York/April 1, 2010) – The International Federation of Accountants (IFAC) has released the 2010 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, and the 2010 Handbook of the Code of Ethics for Professional Accountants.

The Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements includes the International Auditing and Assurance Standards Board’s (IAASB) complete set of clarified International Standards on Auditing (ISAs) and International Standard on Quality Control (ISQC) 1 now in effect. It also includes the IAASB’s standards on review, other assurance, and related services, a glossary, and a preface to the international standards.

The Handbook of the Code of Ethics for Professional Accountants contains the Code of Ethics for Professional Accountants (the Code), which has been revised by the International Ethics Standards Board for Accountants (IESBA) for improved clarity and strengthened independence requirements. The revised Code becomes effective on January 1, 2011, with early adoption permitted

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IAASB LAUNCHES ONLINE QUESTIONNAIRE TO INFORM DEVELOPMENT OF ITS FUTURE STRATEGY

(New York/April 1, 2010) – The International Auditing and Assurance Standards Board (IAASB) is launching an online questionnaire to inform the development of its strategic direction and related work program for 2012-2014. The initiative is part of the IAASB’s broader mandate to consult with key stakeholders to determine which issues should be addressed by the board.

“Input from the public is an important part of the IAASB’s due process,” said Arnold Schilder, IAASB Chair. “It is essential that the IAASB reach out to the broadest group possible to solicit and incorporate outside views. This helps the board determine its future strategic direction and—at the same time—ensures that the board addresses the most relevant issues relating to auditing and financial reporting.”

The questionnaire is the first stage of the IAASB’s 18-month consultation process. Through the survey, the IAASB seeks feedback on the challenges facing the accountancy profession, the IAASB’s current strategic focus on the development, adoption, and implementation of standards, the needs of small and medium practices, and current and future projects, among other topics.

The results of the questionnaire will be used to develop a formal Consultation Paper, to be issued in December 2010, outlining the IAASB’s strategic focus and the potential projects that might best support this focus.

The questionnaire takes no more than 30 minutes to complete and can be accessed online at www.iaasb.org/Resources.php. The IAASB encourages all those with an interest in IAASB-developed international pronouncements to submit responses, which are requested by May 14, 2010.

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IAESB ISSUES CONSULTATION PAPER ON COMPETENCE REQUIREMENTS FOR AUDIT PROFESSIONALS

(New York/March 12, 2010) – The International Accounting Education Standards Board (IAESB) will be revising International Education Standard (IES) 8, Competence Requirements for Audit Professionals, and strongly encourages organizations and individuals to comment on proposed revisions. Comments can be submitted through the IAESB’s newly issued Consultation Paper, which can be found online at www.ifac.org/Guidance/EXD-Outstanding.php.

IES 8 is one of eight standards that addresses the principles of learning and development for professional accountants. The IESs prescribe good practice in learning and development for professional accountants and should be incorporated into the educational requirements of IFAC’s membership body, which is comprised of professional accountancy institutes from around the world. The IESs are also considered relevant to stakeholders interested in the education and development of professional accountants and audit professionals, such as public accounting firms, regulators, and employers.

The IAESB is seeking guidance on a number of issues, including IES 8’s target audience, the knowledge and skills required to work as a competent audit professional, and the advanced-level competences required by audit professionals.

“We want to make IES 8 clearer and more readable, and reduce ambiguity about the requirements imposed on IFAC member bodies,” said Mark Allison, IAESB chair. “In revising IES 8 and developing implementation guidance for this standard, we intend to ensure consistent application, assist in its adoption, and facilitate international implementation.”

The IAESB’s objective in revising IES 8 is to:

· Implement a revised structure that clearly sets out the objective of the IES;

· Clarify obligations imposed on IFAC member bodies;

· Eliminate ambiguity about the requirements;

· Improve the explanation and guidance to support consistent application of IES requirements; and

· Ensure consistency with the other IESs.

The IAESB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this Consultation Paper to their members and employees.

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IFAC LAUNCHES NEW AND IMPROVED PUBLICATIONS AND RESOURCES WEBSITE

(New York/ March 9, 2010) – The International Federation of Accountants (IFAC) has launched a newly redesigned and expanded Publications and Resources website, featuring over 200 titles developed by IFAC and its standard-setting boards and committees. This new site improves the user experience through enhanced navigation and features, including links to recommended publications based on user’s selection.

The website includes the following broad range of pronouncements and resources:

IFAC policy position papers and special reports;
International standards on auditing and assurance, accounting education, ethics, and public sector financial reporting developed by IFAC’s independent standard-setting boards;
Good practice guides on corporate governance, sustainability, and other topics of interest to professional accountants in business; and
Videos, presentation slides, guides to assist small and medium accounting practices, and other tools and resources to facilitate the adoption and implementation of international standards.
Visitors will experience enhanced functionality and interactivity with the addition of a search engine to facilitate user search and retrieval of specific resources of interest. Located on the homepage, a listing of the most recent and most popular publications, along with links to recommended publications, helps professional accountants find publications that are relevant to the work they do.

Explore all the new features and download IFAC publications and resources for free by visiting the website at web.ifac.org/publications.

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global Accountancy leaders support ifac focus on smes and their financial advisors

(New York/March 2, 2010) – Global accountancy leaders support the International Federation of Accountants’ (IFAC) recommendations to intensify its efforts to strengthen small- and medium-sized enterprises (SMEs) and accounting practices (SMPs), IFAC announced today.

IFAC recently convened the chief executives of more than 40 accountancy organizations to discuss how to further alleviate the challenges arising from the recent global financial crisis—also identified in IFAC’s 2009 Global Leadership Survey.

“Small- and medium-sized businesses around the world, and the accounting practices that serve them, are struggling to recover from the global financial crisis,” said IFAC President Robert Bunting. “IFAC and its member organizations must continue to take the lead in addressing the challenges facing SMEs and SMPs, including the need to avoid over-regulation.”

The following areas were at the top of the list for the chief executives who attended IFAC’s annual meeting:

· Expand monitoring of global regulatory reform to ensure its suitability for SMEs and SMPs

· Increase the visibility and voice of SMEs and SMPs

· Collaborate with IFAC members to develop guides and resources to provide practical assistance to SMPs

The chief executives also agreed that IFAC should consider how to increase the participation of SMEs and SMPs in its standard-setting activities.

The chief executives backed IFAC’s proposal to increase emphasis on sustainability reporting and corporate governance-related matters in its priorities for future action.

IFAC will take a stronger role in urging businesses to integrate sustainability throughout the whole of an organization’s decision-making processes. The chief executives supported IFAC’s co-operative work with the Prince of Wales’ Accounting for Sustainability Project and its development of an international connected reporting committee to advance decision making and reporting on sustainability.

The chief executives agreed corporate governance was essential to effective financial reform and that IFAC should press for the implementation of good corporate governance principles, both in the private and public sectors. The accountancy profession’s support for national financial frameworks that embrace corporate governance will be discussed at a joint conference hosted by IFAC and the United Nations Conference on Trade and Development in April in Geneva.

Other topics discussed in the chief executives’ meeting included the issues facing the profession in developing and emerging economies and actions to reinforce the invaluable role of professional accountants in business.

The input received from the chief executives will be considered by the IFAC Board as it develops its strategic plan for 2011-2014.

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In This Issue:

Features:
IFAC and Member Bodies Expand Practical Resources for SMPs
1) SMP Committee Progresses on Practical Support Documents
2) International Center for SMPs Continues to Improve
3) Speeches and Presentations from IFAC SMP Forum 2009 Now Available
4) Member Bodies and Regional Organizations Increase Practical Support for SMPs and SMEs
5) FEE Issues SME Sustainability Policy Statements

IFAC News
6) IAASB Staff Issues Q&As to Raise Awareness of XBRL
7) IFAC Global Leadership Survey Highlights SME/SMP Issues

Other SMP News from Around the World
8) IASC Foundation Launches First Two Sets of Training Modules
9) Other Developments in Private Company Reporting
10) APB Issues Revised Guidance on Smaller Entity Audit Documentation
11) FEE SME/SMP Congress Scheduled for Venice in April
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Features:
IFAC and Member Bodies Expand Practical Resources for SMPs

1) SMP Committee Progresses on Practical Support Documents

Four SMP Committee publications are planned for release in 2010.These projects are:

An updated Guide to Using International Standards on Auditing in the Audits of Small- and Medium-sized Entities (ISA Guide) in Q3 2010. The updated ISA Guide will feature many improvements and conform to the newly clarified ISAs. Designed to help practitioners efficiently apply ISAs to audits of SMEs, the updated ISA Guide will comprise two volumes: Volume 1 will describe the basic concepts of a risk-based audit in conformance with ISAs; and Volume 2 will set out the practical guidance for the audit of SMEs.
A new Guide to Practice Management for Small- and Medium-sized Practices (PM Guide) is expected in Q2 2010. Under development by CPA Australia, the PM Guide is intended to help SMPs operate proficiently and profitably as well as enhance their responsiveness to the needs of their clients. The PM Guide will include practical guidance, case studies, and checklists capable of being tailored to suit the needs of a particular practice or jurisdiction.
An updated Guide to Quality Control for Small- and Medium-sized Practices (QC Guide) is scheduled for issue in Q3 2010. Designed to help SMPs understand and efficiently apply International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements, the updated QC Guide will conform to the revised and redrafted Code of Ethics for Professional Accountants and include other enhancements.
An information paper, the Role of SMPs in Providing Business Support to SMEs, is expected to be released in Q2 2010. The paper will provide some insights into how SMPs can better provide business support to SME clients.
All SMP Committee documents can be accessed at 'Publications' at www.ifac.org/SMP/index.php#Resources.

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2) International Center for SMPs Continues to Improve

The online International Center for Small and Medium Practices (the Center) continues to expand, in particular the set of links to free resources of member bodies and others that are designed to help SMPs apply international standards, manage their practices, offer business advice, and assist them and their SME clients cope with the economic slowdown.

These revised links can be found at www.ifac.org/SMP/relevant_links.php.

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3) Speeches and Presentations from IFAC SMP Forum 2009 Now Available

The Small and Medium Practices (SMP) Committee held is fourth annual IFAC SMP Forum in Beijing in October 2009. Over 200 delegates from more than 40 countries--the largest gathering in the event's history--attended the event, which was co-hosted by the Chinese Institute of Certified Public Accountants and the Confederation of Asian and Pacific Accountants.

The Forum's program covered recent international developments, the work of the IFAC SMP Committee, as well as panel discussions on such topics as "Adapting to the Economic Turbulence and Laying Foundations for Sustainable Growth"; "Ensuring International Standards are Relevant to SMP/SMEs"; and "The Role of SMPs in Providing Business Support to SMEs."

The press release, speeches and presentations from this event are now available in the Center under 'Conferences' at http://www.ifac.org/smp/index.php#Resources. These will be supplemented with streaming videos in the coming weeks funded by the Consiglio Nazionale dei Dottori Commercialisti e Degli Esperti Contabili.

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4) Member Bodies and Regional Organizations Increase Practical Support for SMPs and SMEs

AICPA

The American Institute of Certified Public Accountants (AICPA) has created a special poster that American CPAs can download for free to promote their credentials. The poster, which displays the hallmark values of CPAs and offer the message "It All Adds Up," was also produced in thumbnail size for use on stationery, PowerPoint slides, business cards and more. Click here to access the poster.

The AICPA's Private Companies Practice Section (PCPS) has also developed an Economic Podcast Series to help its member firms help their clients and their own firm get through the economic crisis. The podcasts share experiences from around the US. The podcasts are posted on the AICPA's Economic Crisis Resource Center. See pcps.aicpa.org/Resources/Economic+Podcast+Series/.

CICA

The Canadian Institute of Chartered Accountants (CICA) is offering personalized brochures to promote professional services. A marketing tool for sole practitioners and small-and-medium-sized firms, the CA client development brochures are designed to help CAs build awareness about the services that they provide and reinforce their position as leaders in decision making.

IBRACON

IBRACON, or Instituto dos Auditores Independentes do Brasil, has established a new Working Group, the GT Small and Medium Sized Practices (FPMP), coordinated by Counsellor Ricardo Rodil. According to Rodil, who is also a member of the IFAC SMP Committee, the initiative will include assisting SMPs with the implementation of International Standards on Auditing (ISAs) a permanent forum to ensure that the views of SMPs are heard and promote research on SMPs.

More information on the Working Group is available at www.ibracon.com.br/noticias/destaque.asp?identificador=3608.

ICAEW

The Institute of Chartered Accountants in England and Wales (ICAEW) has developed a set of resources to help SMEs manage and succeed in the next 12 months. See From survival to sustainability.

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5) FEE Issues SME Sustainability Policy Statements

The Fédération des Experts comptables Européens (FEE) has issued three policy statements addressing the subject of sustainability and SMEs. Within these statements, the FEE argues that accountants have a role and a responsibility in helping small enterprises achieve long-term prosperity. The organization also calls on the professional practice community to enhance sustainable thinking in small enterprises by developing and promoting sustainable services and products for their small business.

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IFAC News

6) IAASB Staff Issues Q&As to Raise Awareness of XBRL

The staff of the International Auditing and Assurance Standards Board (IAASB) has developed a new question-and-answer publication that is designed to raise awareness about how XBRL-tagged data is prepared and how it may affect financial reporting.

Entitled XBRL: The Emerging Landscape, the publication explains that the IAASB's current International Standards on Auditing (ISAs) were not developed with XBRL in mind and, accordingly, do not require auditors to perform procedures on XBRL-tagged data as part of a financial statement audit. It clarifies how XBRL may lead to a demand for various types of assurance and related services engagements, and describes the scope of the IAASB's planned consultations to determine whether to develop a new international pronouncement addressing XBRL.

To download the document, see the IAASB section of IFAC's Publications and Resources site: web.ifac.org/publications.

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7) IFAC Global Leadership Survey Highlights SME/SMP Issues

IFAC has released the revised results of its Third Annual Global Leadership Survey which polled the presidents and chief executive officers of its member bodies and associates, regional organizations, and accountancy groupings. IFAC is pleased to issue the results of the global survey, reflecting responses received by 112 presidents and chief executives from member bodies, associates, and regional accountancy organizations and groupings.

The survey indicated that IFAC members are strong advocates for small and midsize businesses, as well as for the adoption of international standards issued by IFAC's independent standard-setting boards and the IASB. The survey also underscored that great strides have been made in the area of corporate governance.

SME and SMP issues featured prominently throughout the report. Respondents believed that, of all IFAC's initiatives during the last year, the most important to the accountancy profession was the IFAC recommendation to the G-20 that regulation or re-regulation in financial policies should not place unreasonable burdens on SMEs. While respondents felt that "addressing the needs of SMEs and SMPs" was the second most important issue for the accountancy profession right now, they expect it to become the most important in the coming years.

The full results of the IFAC 2009 Global Leadership Survey can be accessed here.

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Other SMP News from Around the World

8) IASC Foundation Launches First Two Sets of Training Modules and Proposed IFRS Taxonomy

The International Accounting Standards Committee Foundation (IASC Foundation) has published the two parts of its comprehensive set of training materials for the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs). The free-to-download training material forms part of a range of initiatives undertaken by the IASC Foundation and the International Accounting Standards Board (IASB) to support the widespread adoption of the IFRS for SMEs.

See www.iasb.org/News/Press+Releases/IFRS+for+SMEs+training+material+launch.htm.

The IASC Foundation has also published for public comment an exposure draft of the International Financial Reporting Standards (IFRSs) XBRL Taxonomy 2010. The proposed taxonomy is consistent with IFRSs and the IFRS for SMEs. Interested parties are invited to comment on the exposure draft of the IFRS Taxonomy 2010 and accompanying materials by April 22, 2010. The proposed taxonomy and related material can be accessed here. The final version is expected to be released at the end of April 2010.

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9) Other Developments in Private Company Reporting

Global

At least 35-countries, many developing and emerging economies, have indicated they will either require or permit the use of IFRS for SMEs by 2013. See Accountancy Age.

Europe

The European Commission is seeking the views of stakeholders on the IFRS for SMEs by March 12, 2010. Comments will assist DG Internal Market and Services in its ongoing review of the 4th and 7th Company Law Directives (The Accounting Directives). Stakeholders are invited to comment on the questions raised in this Consultation Paper by completing the response document located at the Commission's website at the following: http://ec.europa.eu/internal_market/consultations/docs/2009/ifrs_for_sme/consultation_IFRS_for_
SMES_questionnaire_en.doc.

USA

A panel created by the AICPA and the Financial Accounting Foundation with support from the National Association of State Boards of Accountancy will explore questions about the future of standard setting for U.S. private companies. Recommendations from the blue-ribbon panel are likely to come in 2010. Read the panel chairman's interview with the Journal of Accountancy. The AICPA is also developing a resource that compares the IFRS for SMEs with corresponding requirements of U.S. generally accepted accounting principles (U.S. GAAP). This resource is available in a Wiki format and you are invited to contribute to its development. To learn more about the resource, view available sections and contribute to its content visit the website.

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10) APB Issues Revised Guidance on Smaller Entity Audit Documentation

The Auditing Practices Board (APB) of the U.K. Financial Reporting Council (FRC) has updated Practice Note 26 which provides guidance and illustrative examples on how the documentation requirements contained within ISAs (UK and Ireland) can be applied to smaller entity audits.

Richard Fleck, Chairman of the APB commented that "The APB received strong support from practitioners, training providers and standard setters in other countries for Practice Note 26 when it was first issued in 2007. This has now been updated to reflect the new ISAs (UK and Ireland) that apply to audits of accounting periods ending on or after 15 December 2010. I hope that the timely publication of this update will assist firms with their implementation of the new standards in 2010."

More about this revised guidance can be found at www.frc.org.uk/apb/publications/pub2193.html.

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11) FEE SME/SMP Congress Scheduled for Venice in April

The next FEE SME/SMP Congress will be held on 15 and 16 APRIL 2010 in Venice in cooperation with the national Italian institute CNDCEC. The event will start on Thursday afternoon with plenary sessions and that evening participants will have the opportunity to enjoy a Networking Dinner. On Friday the Congress will continue with a series of plenary sessions which focus on practical experience, lessons learnt and the use of tools. Both SMPs and small business owners will share their experiences.

The Sessions will cover subjects such as EU and international developments, SMEs' expectations from their accountants, auditing standards and guidance, cross-border activities, services beyond auditing. For detailed information including the program and registration details see http://www.fee.be/events/default.asp?id=30.

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IFAC GLOBAL SURVEY SAYS INTERNATIONAL STANDARDS CRUCIAL TO INVESTOR AND FINANCIAL STABILITY

Global accountancy leaders want the International Federation of Accountants to increase pressure for adoption, implementation, and enforcement of standards

(New York/February 22, 2010) – Investors and all consumers of financial information deserve clear, reliable, and consistent information, IFAC organizations from around the world asserted in a survey by the International Federation of Accountants (IFAC).

The adoption, implementation, and enforcement of international financial standards is crucial, according to the latest IFAC Global Leadership Survey, which polled its membership of 157 accountancy organizations in 123 countries.* The presidents and chief executives responding to the survey said that IFAC needs to continue to lead the convergence of standards developed by its independent standard-setting boards, relating to auditing and assurance, education, ethics and public sector accounting, and to support the implementation of those standards.

The IFAC Global Leadership Survey announced in a revised version today the accountancy profession’s leadership views of top priorities as:

· Increase confidence in international standards for accounting and auditing, in both the private sector and the public sector

· Adopt but also implement international standards, including principles of good corporate governance

· Urge the G-20 to not place unreasonable burdens on small and medium-sized enterprises through new regulations or re-regulation

“To move beyond the current crisis and ensure protection for all investors and taxpayers, the necessary parties around the world need to adopt and implement high-quality global standards,” says IFAC CEO Ian Ball. “It is crucial for governments and regulators to take decisive actions in their countries and put in place their international commitments to converged standards.”

The survey also found that the demand for professionals in public practice, business, and the public sector is expected to be high in the next three years. Student interest in accountancy has increased dramatically over the past three years, according to survey results. The profession was rated “Very attractive” or “Attractive” to university-level students, as well as experienced professionals and graduates who recently entered the field.

This version of the survey includes responses from more than 110 presidents and chief executives of IFAC members and regional accountancy organizations and groupings around the world.

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IPSASB Seeks Views on Accounting for Service Concession Arrangements by Grantors

(New York/February 19, 2010) - The International Public Sector Accounting Standards Board (IPSASB) is seeking comments on an exposure draft (ED) that addresses accounting for service concession arrangements by the grantor. Service concession arrangements, often called Private Public Partnerships or PPPs, involve an operator providing services to the public on behalf of a grantor—usually the government or another public sector entity. For many countries, such arrangements are a means to ensure large-scale, infrastructure projects, such as the building of roads and airports, can be developed and provided to the public for use. However, in some cases, they are not recognized in the financial statements, effectively concealing the financial position of the grantor.

Entitled Service Concession Arrangements: Grantor, the ED presents requirements and guidance on how grantors recognize, account for, and disclose assets in service concession arrangements. Currently, there is no international standard to address the accounting for such arrangements from the grantor’s perspective as IFRIC 12, Service Concession Arrangements, issued by the International Financial Reporting Interpretations Committee (IFRIC), applies only to the operators of these arrangements.

The IPSASB’s proposals seek to assist the public sector in ensuring the assets used to provide the public service in the service concession arrangements are recognized appropriately in public sector financial statements and provide relevant disclosures about the arrangement. To ensure consistency in accounting by both parties to the service concession arrangement, the criteria for recognizing the assets are based on principles set out in IFRIC 12.

"The use of service concession arrangements as a means for the public sector to build and improve public services has increased dramatically in recent years. This increase in volume coupled with the lack of an international standard for grantors in such arrangements made action in this area of critical importance for the financial stability of governments,” said IPSASB Chair Andreas Bergmann, adding, “This ED aligns with the IPSASB’s long-held goal of promoting and enhancing the transparency, accountability, and decision making of the public sector.”

How to Comment

To access the exposure draft or submit a comment, visit the IFAC website at www.ifac.org/Guidance/EXD-Outstanding.php. Comments on the exposure draft are requested by June 30, 2010.

The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this exposure draft to their members and employees.

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February 18, 2010

Welcome to the first issue of the IFAC Member Body Development eNews.

IFAC's Member Body Development activities include promoting and supporting the role of professional accountancy organizations, facilitating the work of its members in the adoption and implementation of international standards, collaborating with the donor community to build capacity in emerging economies, and raising awareness about the issues being addressed by the profession globally. These activities are carried out by the Member Body Development staff with advice and consultation from the IFAC Compliance Advisory Panel and the Developing Nations Committee.

The Member Body Development eNews will highlight the work of IFAC members, recognized regional organizations, and acknowledged accountancy groupings, and the development community to strengthen and contribute to the worldwide accountancy profession.

We welcome all of your comments and suggestions for making this new publication even better. For further information, please contact This email address is being protected from spam bots, you need Javascript enabled to view it .

In this Issue:

1) IFAC Members Focus on Actions and Continuous Improvement
2) Capacity Building Initiatives
3) New IFAC Members and Associates
4) International Standards Adoption - ISA Update
5) Share MBD eNews With Your Colleagues
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1) IFAC Members Focus on Actions and Continuous Improvement

The IFAC Member Body Compliance Program was launched in 2004 to encourage continuous improvement by IFAC members and associates. The foundation of the program is articulated in IFAC's membership requirements (Statements of Membership Obligations (SMOs)). The SMOs cover seven areas of relevance to the profession and focus on promoting the adoption and implementation of international standards, as well as investigation and disciplinary mechanisms and external quality assurance.

The program is currently in the Part 3, Action Plan phase, launched after the initial two phases that were designed to gather information about national standard setting and regulatory frameworks. Action Plans are developed by IFAC members and associates to illustrate how these organizations are addressing SMOs requirements. In the interest of transparency, action plans are published on the IFAC website. To date, 76 organizations have published their Action Plans on the IFAC website with an additional 39 plans under review by the Compliance staff.

The Action Plan process recognizes that IFAC members and associates are at different stages of development and operate in different jurisdictions. However, the primary purpose of the process is to encourage continuous improvement.

"Participating in the Compliance Program has been a truly meaningful and rewarding experience for CICPA, leading to important improvements in major areas of the development of the accounting profession in China. The Policy Recommendation and Action Plan process, in particular, have been very helpful for us to work out the convergence plan, enhance the quality assurance program, and communicate effectively with regulators, the government, and other key stakeholders." (The Chinese Institute of Certified Public Accountants)

In the coming issues of this eNews, we will be highlighting interesting and insightful developments related to the process.

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2) Capacity Building Initiatives

Through Member Body Development activities, IFAC seeks to represent the profession in developing nations, and provide guidance and other resources to meet their needs. IFAC also seeks funding from the donor community for the strengthening of the accountancy profession in developing nations. Some of these initiatives are highlighted below.

West Africa Workshop
In November 2009, several professional accountancy bodies of West Africa participated in the conference organized by the Association of Accountancy Bodies in West Africa (ABWA) in Senegal. In addition to participating in the event, IFAC staff and Developing Nations Committee members organized a workshop attended by 12 of the 15 ABWA member bodies, ABWA leadership, and representatives from the World Bank to focus on the role of professional accountancy organizations and the requirements for IFAC membership. The workshop participants discussed the IFAC membership application process and Member Body Compliance Program. They also discussed the international standard-setting process in the region of West Africa. The economic size and unique regulatory framework of the region has resulted in establishing a regional mechanism coordinating standard setting for the francophone countries in the region.

Outreach in Poland, Latvia, Lithuania
Also in November 2009, Member Body Development staff met with IFAC members in Poland, Lithuania, and Latvia. The meetings with these national professional accountancy organizations served as an opportunity to follow-up on recent developments with regards to implementation of European Union regulations relating to the profession, as well as the progress of their Action Plans. Additional meetings were held with key stakeholders in each country, including representatives of Ministries of Finance and Public Oversight bodies. Information was exchanged on the roles of the profession and the oversight body in meeting EU requirements, and the general progress of oversight mechanisms.

Central America Workshop
IFAC representatives organized and lead discussions at a workshop on the IFAC Action Plan process in Panamá in January 2010. The initiative was proposed by the Colegio de Contadores Públicos Autorizados de Panamá (CCPAP) with the event being attended by IFAC members in the Dominican Republic, Nicaragua, and Costa Rica, the president of the regional organization, the Inter-American Accounting Association, and a World Bank financial management specialist for the sub-region. A representative from the World Bank also presented on the World Bank perspective of the Action Plan process, noting particular usefulness of the process for the capacity building of the accountancy profession. Representatives from the member bodies presented on their progress with drafting Action Plans and exchanged experience on region-specific challenges, including strengthening education requirements and providing meaningful implementation support for the international standards being adopted in their countries. At the conclusion of the workshop, all participants and presenters agreed that going forward this type of collaborative approach is the best way for progress to be achieved and sustained.

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3) New IFAC Members and Associates

During IFAC's 32nd Annual Council Meeting, the IFAC Council approved five new organizations to member or associate status. We congratulate them on this significant achievement.

New Members

1. Iran - Iranian Association of Certified Public Accountants (IACPA) - www.iacpa.ir

The Iranian Association of Certified Public Accountants was created by law in 1994 and became operational in 2001. IACPA members, in addition to audits of financial statements, perform management consultancy, accountancy work, insolvency and liquidation management, internal audits, and management (performance) audits. IACPA has about 1,800 CPA members employed in the public practice, business, and public sectors. In September 2009, IACPA finalized its IFAC Compliance Program Part 3, Action Plan, which is published on the IFAC website.

2. Latvia - Latvian Association of Certified Auditors (LACA) - www.lzra.lv

The Latvian Association of Certified Auditors was created pursuant to the Law on Certified Auditors of January 1, 1977. LACA is officially recognized as the only professional organization in Latvia authorized to unite all certified auditors and commercial companies of certified auditors. Presently, LACA is comprised of 160 certified auditors and 140 audit firms and this number is adequate for the size of the audit market in Latvia. According to the Audit Law, only members of LACA are authorized to perform statutory audits. Additional information about LACA's planned activities are described in its Action Plan.

3. Kosovo - Society of Certified Accountants and Auditors of Kosovo (SCAAK) - www.scaak-ks.org

The Society of Certified Accountants and Auditors of Kosovo was created under the framework established by the Law on Financial Reporting of 2001. SCAAK is the only professional accounting and auditing body in Kosovo and has a clear objective of supporting adoption of international standards. SCAAK membership includes 124 certified auditors, 548 certified accountants, and 1,318 accounting technicians. Additional information about SCAAK's planned activities are described in its Action Plan.

New Associates

4. Brunei Darussalam - Brunei Darussalam Institute of Certified Public Accountants (BICPA) - www.bicpabrunei.com

The Brunei Darussalam Institute of Certified Public Accountants was registered with the Registrar of Societies of Brunei Darussalam on June 7, 1987. It was formed to allow the accountants in Brunei Darussalam to develop and promote the profession in the country. BICPA plays a role in advising the Ministry of Finance of Brunei in standard-setting activities and supporting implementation of standards. Members of BICPA are recognized by the Ministry of Finance as public accountants (Authorized Auditors). BICPA membership, currently 70 members, reflects the small population of the country. As an IFAC associate, BICPA will work on developing its IFAC Compliance Program Part 3, Action Plan.

5. Luxembourg - Ordre des Experts-Comptables du Luxembourg (OEC) - www.oec.lu

The Ordre des Experts-Comptables du Luxembourg joins IFAC as the second organization representing Luxembourg. OEC is the professional accountancy organization representing the profession of experts-comptables in the country. It was originally established as the Ordre des Experts-Comptables Luxembourgeois (OECL) in 1950. Following the changes in the country's legal framework, it was transformed into OEC in 1999. OEC has close to 1,000 members that provide a wide range of services, including preparation of financial statements and contractual audits. As an IFAC associate, OEC will work on developing its IFAC Compliance Program Part 3, Action Plan.

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4) International Standards Adoption - ISA Update

Professional accountancy organizations play an important role in the adoption and implementation of international standards within effective regulatory frameworks. This includes the adoption and of International Standards on Auditing (ISAs) as developed by the International Auditing and Assurance Standards Board (IAASB). To help the public, member bodies, and other stakeholders better understand the ongoing nature of the adoption process, IFAC has released an interactive chart that captures the status of ISA adoption process in different jurisdictions around the world Basis of ISA Adoption Chart.

The chart, at the time of publication of this eNews, shows that a total of 126 jurisdictions worldwide have adopted ISAs to at least some degree. The basis of ISA adoption used in preparing the chart is categorized as follows:

Required by Law or Regulation 11
ISAs are Adopted 32
National Standards are the ISAs 28
Other 55
TOTAL 126

Adoption of ISAs, including the clarified ISAs, and changes to strengthen local regulatory and standard-setting frameworks is an ongoing process. Consequently, the chart and related notes will be updated as national standard-setters and IFAC members provide information about their country's progress. Compliance staff encourages information to be submitted to Technical Manager Szymon Radziszewicz at This email address is being protected from spam bots, you need Javascript enabled to view it .

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5) Share MBD eNews with Your Colleagues

Going forward, the MBD staff will issue regular eNews updates to keep you current on recent developments. Please forward this eNews to any interested colleagues and advise them that they can subscribe to receive the next issue of MBD eNews by following these simple steps:
1. Go to the eNews sign-up page at www.ifac.org/E-news/index.tmpl.
2. Enter your email address, name, and country.
3. Select "MBD eNews" from the checklist, as well as any other eNews alerts that IFAC publishes.

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IPSASB Publishes New Standard on Intangible Assets; Improvements to Standards

(New York/January 28, 2010) - The International Public Sector Accounting Standards Board (IPSASB) has published a new International Public Sector Accounting Standard (IPSAS) that covers the accounting for and disclosure of intangible assets: IPSAS 31, Intangible Assets. It fills a gap in the IPSASB literature and adds some guidance on public sector-specific issues, including intangible heritage assets.

“Until this new IPSAS, there has been no direct guidance to address intangible assets that exist in the public sector. The new standard will enhance consistency in accounting for intangible assets, while also laying the groundwork for dealing with some of the more complex public sector-specific issues going forward,” states Andreas Bergmann, IPSASB Chairman.

IPSAS 31 is primarily drawn from the International Accounting Standards Board’s (IASB) IAS 38, Intangible Assets. It also contains extracts from the IASB’s Standing Interpretations Committee Interpretation 32 (SIC 32), Intangible Assets—Web Site Costs, adding application guidance and illustrations that have not yet been incorporated into the IAS. At this point, IPSAS 31 does not deal with uniquely public sector issues, such as powers and rights conferred by legislation, a constitution, or by equivalent means; the IPSASB will reconsider the applicability of the standard to these powers and rights in the context of its conceptual framework project, which is currently in progress.

The IPSASB has also published Improvements to IPSASs, to conform with minor changes to International Financial Reporting Standards (IFRSs) that were made since the related IPSASs were originally released. These are part of a series of annual improvements that is modeled on a successful IASB annual update program.

“While we have achieved substantial convergence with IFRSs (dated December 2008), it is necessary for the IPSASB to continually reassess the IPSASs to ensure that they remain relevant to users of public sector financial statements," states Mr. Bergmann.

IPSAS 31 and Improvements to IPSASs are available to download free of charge from the IPSASB section of IFAC's Publications and Resources site (web.ifac.org/publications). The IPSASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to members and employees.

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ANNOUNCEMENT

IFAC Posts Notice of Withdrawal of Report on 2009 Third Annual Global Leadership Survey

(New York/January 22, 2010) - The International Federation of Accountants (IFAC) has posted a notice to alert its members, recognized regional organizations, acknowledged accountancy groupings, and the public of the withdrawal of the report on the 2009 Third Annual Global Leadership Survey. The report was issued on January 15, 2010.

The report has been withdrawn to incorporate additional responses and update the list of respondents. The report will be re-issued within the next few weeks.

If you have any questions, please contact Alta Prinsloo, Director, Governance and Operations, at This email address is being protected from spam bots, you need Javascript enabled to view it or Sylvia Barrett, Acting Deputy Director, Communications at This email address is being protected from spam bots, you need Javascript enabled to view it .

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IFAc announces promotion of senior leadership

(New York/January 20, 2010) – The International Federation of Accountants (IFAC) has announced the promotion of two senior staff who lead its Quality and Member Relations initiatives focused on enhancing the capacity of the profession and addressing the needs of audit practices around the world.

The appointments are:

· Russell A. Guthrie, CPA, to the position of Executive Director – Quality and Member Relations; and

· Sylvia Barrett, CA, to the position of Director – Quality and Member Relations.

Mr. Guthrie and Ms. Barrett will focus on IFAC’s initiatives supporting global practice quality and the role of IFAC’s member bodies, which are professional accountancy organizations. IFAC plans to continue to address emerging issues facing practitioners and to further increase opportunities for collaboration with key stakeholders, including development agencies.

Russell Guthrie appointed to Executive Director – Quality and Member Relations

In his new position, Mr. Guthrie, who joined IFAC in March 2001, will have a prominent role in the IFAC Management Team and lead the strategy for the Quality and Member Relations initiatives. His key areas of focus will be stakeholder relations, the continued implementation of the Member Body Compliance Program, and enhancing IFAC’s efforts to support the growth of the accountancy profession in developing and emerging economies.

“Promotion to the role of Executive Director recognizes the broad range of Russell’s responsibilities,” states Ian Ball, IFAC Chief Executive Officer. “His extensive experience within IFAC and the global profession ideally positions him to lead IFAC’s quality initiatives as well as develop and maintain positive relationships with external groups and stakeholders.”

Sylvia Barrett appointed to Director – Quality and Member Relations

Ms. Barrett will utilize her knowledge about the roles and needs of professional accountants and her experience in implementing strategic programs to advance IFAC’s activities for small and medium practices, transnational audit practices, and the adoption, translation, and implementation of global standards. Ms. Barrett first joined IFAC in April 2002, as a Technical Manager with the International Auditing and Assurance Standards Board (IAASB). In her current position as Deputy Director of Member Body Development, Ms. Barrett supports IFAC’s Member Body Compliance Program, Developing Nations Committee, and is currently acting as head of the Communications Department.

“Sylvia not only has made significant contributions to IFAC’s success over the past several years, but she also has extensive knowledge of the challenges facing the global accountancy profession,” notes Mr. Ball. “Sylvia’s promotion to Director and to the IFAC Management Team reflects the expansion of her job responsibilities and the important role she will play in advancing the next phase of key IFAC programs.” Ms. Barrett will transition into her new position and responsibilities during the second quarter of 2010.

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IPSASB PUBLISHES THREE NEW STANDARDS ON FINANCIAL INSTRUMENTS

(New York/January 19, 2010) - The International Public Sector Accounting Standards Board (IPSASB) has published three new standards that cover all aspects of the accounting for and disclosure of financial instruments: International Public Sector Accounting Standard (IPSAS) 28, Financial Instruments: Presentation; IPSAS 29, Financial Instruments: Recognition and Measurement; and IPSAS 30, Financial Instruments: Disclosures. They fill a significant gap in the IPSASB literature.

“These new IPSASs provide a coherent set of requirements that enhance accountability for financial instruments in the public sector; this need was reinforced by the global financial crisis, and the scale and range of interventions made by governments,” states Andreas Bergmann, who became Chair of the IPSASB on January 1, 2010.

The three new IPSASs are primarily drawn from the International Accounting Standards Board’s standards, but address a number of public sector-specific issues:

IPSAS 28, Financial Instruments: Presentation, primarily draws on IAS 32 and establishes principles for presenting financial instruments as liabilities or equity, and for offsetting financial assets and financial liabilities.
IPSAS 29, Financial Instruments: Recognition and Measurement, primarily draws on IAS 39, establishing principles for recognizing and measuring financial assets, financial liabilities, and some contracts to buy or sell non-financial items.
IPSAS 30, Financial Instruments: Disclosures, draws on IFRS 7 and requires disclosures for the types of loans described in IPSAS 29. It enables users to evaluate: the significance of the financial instruments in the entity’s financial position and performance; the nature and extent of risks arising from financial instruments to which the entity is exposed; and how those risks are managed.
These IPSASs address some key public sector issues, including financial guarantee contracts provided for nil or nominal consideration and concessionary loans.

Financial guarantee contracts provided for nil or nominal consideration have been a feature of government interventions during the global crisis—often, they are for very large amounts and could not be provided by private sector guarantors. IPSAS 29 provides guidance on the accounting treatment of such guarantees, both at initial recognition and subsequently.
Concessionary loans are granted or received at below market terms, often for social policy objectives. IPSAS 29 provides guidance on the determination of fair value. It also addresses the treatment of the difference between the fair value of a loan and the loan proceeds. IPSAS 30 requires disclosures relating to such loans.
“The IPSASB recognizes the need to closely monitor global developments in the accounting for financial instruments and to evaluate such changes promptly in a public sector context,” says Mr. Bergmann, adding that, together with the soon-to-be-issued IPSAS on intangible assets, IPSASs 28–30 represent the substantial attainment of IPSAS convergence with IFRSs (dated December 2008).

IPSASs 28–30 are available to download free of charge from the IPSASB section of IFAC’s Publications and Resources site (web.ifac.org/publications). The IPSASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to members and employees.

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IAASB Staff Issues Q&As to Raise Awareness of XBRL Uses in Business Reporting

(New York/January 19, 2010) – Recognizing the growing international use of Extensible Business Reporting Language (XBRL)—a language for the electronic communication of business and financial data that is changing business reporting around the world—the staff of the International Auditing and Assurance Standards Board (IAASB) has developed a new question-and-answer publication. It is designed to raise awareness about how XBRL-tagged data is prepared and how it may affect financial reporting.

Entitled XBRL: The Emerging Landscape, the publication explains that the IAASB’s current International Standards on Auditing (ISAs) were not developed with XBRL in mind and, accordingly, do not require auditors to perform procedures on XBRL-tagged data as part of a financial statement audit. It clarifies how XBRL may lead to a demand for various types of assurance and related services engagements, and describes the scope of the IAASB’s planned consultations to determine whether to develop a new international pronouncement addressing XBRL.

“As more and more financial authorities begin to require or permit entities to provide financial information in XBRL, now is the time to help educate users about some XBRL fundamentals, and for the IAASB to explore whether and how a related international standard might help address assurance needs,” says James Gunn, IAASB Technical Director. “A number of organizations are involved in XBRL initiatives and we look forward to hearing the viewpoints of preparers, users, regulators, national standard-setters, auditors, and others on this important topic,” adds Mr. Gunn.

The publication is available to download free of charge from the IAASB section of IFAC’s Publications and Resources site: web.ifac.org/publications.

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IFAC Seeks Nominations for its Boards and Committees

(New York/January 15, 2010) – The International Federation of Accountants (IFAC) has posted an announcement to alert its members, the Forum of Firms, international organizations, and the public about its Call for Nominations to IFAC Boards and Committees in 2011.

Both the Call for Nominations and a companion guide, Developing a Nominations Strategy, are designed to help IFAC find the best person for each available position on its boards and committees, while also achieving a gender, regional, and professional balance. These extensive publications contain strategic and practical advice for nominating organizations, allowing them to make better informed decisions in selecting their nominees and to understand what is expected of them.

Nominations may be submitted from January 15 to March 15, 2010, by sending the completed Candidate Information Form via email to This email address is being protected from spam bots, you need Javascript enabled to view it . This form, along with more information about the nominations process and the Help Sheet, which includes detailed information on filling out the form, can be downloaded from the Nominating Committee section of the IFAC website: www.ifac.org/NominatingCommittee.

If you have any questions, please contact Laura Buijs, Governance Manager, at This email address is being protected from spam bots, you need Javascript enabled to view it .

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IFAC SURVEY SHOWS ACCOUNTANTS AS ADVOCATES FOR SMALL BUSINESS AND GLOBAL STANDARDS, HIGHLIGHTS CORPORATE GOVERNANCE REFORMS

(New York/January 15, 2010) – As world economies recover from the global financial crisis, the Third Annual Global Leadership Survey of the International Federation of Accountants (IFAC) revealed its membership as vocal advocates for small and midsize businesses, as well as for the adoption of global accounting and auditing standards. It also highlighted corporate governance enhancements in jurisdictions around the world.

"Our members took action to assist their jurisdictions during the crisis, lending their expertise to governments and businesses. Through a variety of outreach programs, they also let the public know what a valuable role the professional accountant plays in all the sectors we serve, especially in a time of crisis,” says IFAC Chief Executive Officer Ian Ball. Mr. Ball noted that, in October and November 2009, IFAC received 105 responses to its online survey from the presidents and chief executives of accountancy institutes, and regional accountancy organizations and groupings. He adds, "Survey respondents believe that continued emphasis on effective implementation of international accounting and auditing standards and good corporate governance principles are critical issues for the future.”

Public sector finance improvements. Because the financial crisis led to many governments’ assuming an interventionist role in their economies through providing a range of guarantees and undertaking bailouts of major banks and other institutions, among other actions, the survey sought information on efforts to improve the transparency and accountability of governments for public sector finance. Many respondents reported their countries were in the process of adopting the International Public Sector Accounting Standards (IPSASs), which can provide the reliable information about government finances that is so important in the context of the crisis.

Corporate governance enhancements. When survey participants were asked whether there had been enhancements to corporate governance in their jurisdictions, the majority reported that there had either been improvements, that actions were in process, or that such changes were being considered. In particular, they reported the adoption of the Organisation for Economic Co-operation and Development’s (OECD) good governance principles, but there was an extensive range of responses, from making it mandatory for companies of a certain size to create an audit committee, to introducing codes specific to small businesses.

Demand for accountants. IFAC’s survey also asked about the demand for accountants throughout the broad spectrum of sectors in which they work, and found that the profession remains attractive to students and those already in the field. According to survey responses, the demand for accountants remains high, worldwide, with growing interest in the government and academic sectors. Participants believe the demand for accountancy professionals will grow in the coming years.

Unity of the profession. Finally, respondents believe in the importance of maintaining the unity of the accountancy profession, in order to play a role in the changing regulation of the financial sector internationally. They said that they believe that IFAC should continue in its roles as a voice of the global profession—such as its memoranda to the G-20 leaders on reform of the global financial system, including special consideration for the needs of SMEs (small and medium entities)—and as a global standard-setter for auditing and public sector accounting, and professional ethics and education.

The full report is available in the Policy Position Papers and Reports section of IFAC’s Publications and Resources site.

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“Enterprise Governance” Winner of IFAC’s Articles of Merit for Professional Accountants in Business

(New York/January 13, 2010) – “Enterprise Governance” was chosen as the top article published in 2009 for Professional Accountants in Business (PAIB) by the member bodies of the International Federation of Accountants (IFAC). The Articles of Merit Award Program identifies and promotes outstanding articles on financial and management accounting topics that have previously appeared in the publications of IFAC's 159 member bodies and associates. The articles were selected by IFAC's PAIB Committee and visitors to IFAC’s International Center for Professional Accountants in Business.

The 2009 winning article challenges conventional business thinking: Businesses should be more circumspect during a boom and be better prepared to take risks under harsh conditions. It was first published in Financial Management, the monthly members’ magazine of the Chartered Institute of Management Accountants.

“Enterprise Governance” and the other top articles form the basis of an annual publication, also called Articles of Merit, which covers the important issues affecting the work of professional accountants worldwide. The publication’s nine runner-up articles offer additional advice and insights for professional accountants in business on such topics as capital grants, investment appraisal, and shared services, with useful ideas on matters such as governance and risk management, accounting for sustainability, and writing board reports.

The 2009 Articles of Merit, together with previous publications, can be downloaded free of charge from the Publications & Resources section of the IFAC website. Each of the ten articles may also be downloaded individually

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January 12, 2010

. We welcome your comments.

This issue focuses exclusively on the newly-released Framework for International Education Standards for Professional Accountants (the "Framework").

In this issue:

1) IAESB Enhances Relevancy and Consistency of Education Standards with New Framework
2) Framework Outlines Fundamental Concepts for Education Standards
3) Support Material for New Framework
4) Share IAESB eNews with Your Colleagues
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1. IAESB Enhances Relevancy and Consistency of Education Standards with New Framework

Following the approval of due process by the Public Interest Oversight Board, the IAESB has released its Framework for International Education Standards for Professional Accountants (the Framework), designed to enhance the relevancy, consistency, and applicability of its publications to IFAC member bodies and other interested stakeholders in accounting education.

The new Framework document replaces the previously existing Framework for International Education Pronouncements and the Introduction to the International Education Standards documents which were published in October 2003. It uses a more concise and simplified structure that:

Sets out the underlying educational concepts which the IAESB uses in its publications; and,
Provides an overview of its publications and related IFAC member body obligations.
The Framework also includes an appendix, titled "IAESB Drafting Conventions" (the Drafting Conventions). This appendix will serve a number of roles, including acting as a guideline when improving the clarity of education standards.

Moreover, the language and tone of the Framework document has been simplified to ensure that first-time readers can readily understand its content. In addition both developing and developed member bodies will obtain a better understanding of their obligations when developing learning and development programs for professional accountants.

The intended benefits of the Framework include:

The development of International Education Standards (IESs) which are consistent, because they are based on a common set of concepts relevant to education;
A more efficient and effective standard-setting process, because the IAESB debates issues from the same conceptual base; and
Increased transparency and accountability of the IAESB for its decisions, because the concepts underlying the Board's decisions are known.
The Framework can be accessed via the Education section of the IFAC Publications website at web.ifac.org/publications.

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2. Framework Outlines Fundamental Concepts for Education Standards

Part One of the Framework describes the following educational concepts:

competence,
initial professional development,
continuing professional development, and
assessment used by the IAESB when developing IESs.
Each of these is important in the development of a professional accountant. Competence is defined as the ability to perform a work role to a defined standard with reference to working environments. An individual becomes competent through learning and development. The term "learning and development" refers to the ongoing process of acquiring, maintaining, and renewing competence at an appropriate level throughout a professional accountant's career.

The learning continuum that occurs during a professional accountant's career includes stages of initial professional development and continuing professional development. Initial Professional Development enables an individual to first develop competence leading to performing a role in the accountancy profession. Continuing Professional Development is used to maintain and develop capabilities to enable professional accountants to perform their roles competently.

The effectiveness of learning and development programs must be assessed regularly to ensure that professional accountants can continue to meet the demands of society. The IAESB will apply the educational concepts set out in the Framework when developing the IESs. In the absence of a specific IES, IFAC member bodies and other interested parties should also apply these concepts when designing, delivering, and assessing education for professional accountants.

Part Two of the Framework describes the nature of IESs and related publications, as well as related IFAC member body obligations. IESs prescribe good practice in learning and development and are thus more authoritative than International Education Practice Statements, which provide guidance (for example, on how to achieve good practice). The practice statements are, in turn, more directive than Information Papers and Support Material, which discuss issues (including emerging issues), present findings, or assist in achieving good practice.

The Framework is addressed primarily to IFAC member bodies because of their interest in the education, development, and assessment of their members and students. It is also relevant to a wide range of stakeholders, including accounting faculties at universities, employers of professional accountants, professional accountants, prospective professional accountants, and others interested in the work of the IAESB.

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3. Support Material for New Framework

IFAC staff has developed support material in the form of a PowerPoint presentation and supporting speaking notes to assist in providing an overview of the content of the Framework. In addition, staff has prepared a summary of the changes made to the original Framework document which enables interested readers toreadily identify significant changes. This support material is available on the IAESB website at: www.ifac.org/Education/Resources.php.

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4. Share IAESB eNews with Your Colleagues

The IAESB issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and advise them that they can subscribe to receive the next issue of IAESB eNews directly into their inbox by following these simple steps:
1. Go to the eNews sign-up page at http://www.ifac.org/E-news/index.tmpl.
2. Enter their email address, name and country.
3. Select "IAESB eNews" from the checklist as well as any other eNews alerts that IFAC publishes.

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IFAC'S ACCOUNTING EDUCATION STANDARDS BOARD RELEASES NEW FRAMEWORK AND DRAFTING CONVENTIONS TO ENHANCE CLARITY OF ITS STANDARDS

(New York/December 16, 2009) – The International Accounting Education Standards Board (IAESB), an independent standard-setting board within the International Federation of Accountants (IFAC), has released its Framework for International Education Standards for Professional Accountants (the Framework), which enhances the relevancy, consistency, and applicability of its publications to IFAC members. The Framework sets out the educational concepts that underlie the IAESB’s International Education Standards (IESs), describes the nature of IAESB publications, and affirms IFAC member bodies’ obligations relating to accounting education. The Framework also includes an appendix, “IAESB Drafting Conventions” (the Drafting Conventions), which will be used to increase the clarity of its standards.

"Our Framework improves upon the understanding and application of the principles and concepts that underlie the education and development of a professional accountant,” states IAESB Chair Mark Allison. “The Framework and the Drafting Conventions enable the IAESB to deploy a more efficient and effective standard-setting process and to better demonstrate accountability for its decisions.”

The Framework document has been released following the consideration and approval by the Public Interest Oversight Board of due process and extensive public interest consultation. The document is available to download free of charge from the Publications and Resources section of the IFAC website (http://web.ifac.org/publications).

IPSASB ISSUES STANDARD ON AGRICULTURE AS PART OF ITS GLOBAL CONVERGENCE PROGRAM

(New York/December 7, 2009) – The International Public Sector Accounting Standards Board (IPSASB) has taken a further step in its global convergence program with International Financial Reporting Standards (IFRSs), scheduled for completion by December 31, 2009, by issuing International Public Sector Accounting Standard (IPSAS) 27, Agriculture. IPSAS 27 provides requirements for accounting for agricultural activity.

IPSAS 27 is primarily drawn from the International Accounting Standards Board’s International Accounting Standard 41, Agriculture, with limited changes dealing with public sector-specific issues. For example, IPSAS 27 addresses biological assets—such as livestock—held for transfer or distribution at no charge or for a nominal charge to other public sector bodies or to not-for-profit organizations. IPSAS 27 also includes disclosure requirements that are aimed at enhancing consistency with the statistical basis of accounting that governs the Government Finance Statistics Manual.

“Agricultural activity can be significant for the public sector in certain parts of the world, including many developing countries,” states Mike Hathorn, Chair of the IPSASB. “This IPSAS provides financial reporting requirements that enhance accountability for such activity and are a further step towards our convergence target.”

IPSAS 27 is available to download free of charge from the IFAC website (www.ifac.org/Store). The IPSASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to members and employees.

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IPSASB ISSUES CONSULTATION PAPER ON REPORTING ON THE LONG-TERM SUSTAINABILITY OF PUBLIC FINANCES

(New York/November 24, 2009) – There is a growing understanding that future generations of taxpayers will have to deal with the fiscal consequences of current government policies. Concerns about the ability of governments to meet future service delivery and financial commitments for health, pensions, debt-servicing, and other obligations have long existed, but have increased in the current economic environment. Uncertainty over the long-term financial consequences of government interventions, including the bailouts and stimulus packages that have characterized the global financial crisis, has added another dimension to concerns over the long-term sustainability of public finances in many countries.

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has just published a Consultation Paper, Reporting on the Long-Term Fiscal Sustainability of Public Finances. It seeks views on how information on the long-term sustainability of government programs, increasingly available in many jurisdictions, may complement information available in traditional financial statements, thereby increasing transparency and enhancing accountability and decision making.

“The need for understandable information on the long-term sustainability of all governmental programs has become increasingly apparent from the work that the IPSASB has carried out in developing its own public sector conceptual framework and on accounting for social benefits,” says Mike Hathorn, Chair of the IPSASB. “There is a growing awareness that such information can be crucial in allowing citizens to evaluate the scale of the fiscal challenges facing governments, so that the impact on future generations can be better understood. This Consultation Paper asks for views on how such information might be reported.”

The IPSASB’s project has benefited greatly from the work of a task force, including representatives from governments, audit offices, accounting standard-setters, statistical accountants, and international organizations. Projects recently undertaken by the Organisation for Economic Co-operation and Development and the United States Federal Accounting Standards Advisory Board have been particularly valuable.

The Consultation Paper is available to download free of charge from the IFAC website (www.ifac.org/Guidance/EXD-Outstanding.php). The IPSASB encourages IFAC members, associates, and regional accountancy bodies to promote the availability of this Consultation Paper to their members and employees.

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IFAC Posts Notice of the Call for Nominations for IFAC Boards and Committees in 2011

(New York/November 20, 2009) – The International Federation of Accountants (IFAC) has posted an announcement to alert its members and the public of its Notice of the Call for Nominations to IFAC Boards and Committees in 2011.

Both the Notice of the Call for Nominations and its companion guide, Developing a Nominations Strategy, are designed to help IFAC find the best person for each available position on its boards and committees, while also achieving a gender, regional, and professional balance. These extensive publications contain strategic and practical advice for nominating organizations, allowing them to make more informed decisions in selecting the persons they nominate and to understand what is expected of them.

The actual Call for Nominations for IFAC Boards and Committees in 2011 will be issued on January 15, 2010, and nominations may be submitted from January 15 to March 15, 2010.

If you have any questions, please contact Laura Buijs, Governance Manager, at This email address is being protected from spam bots, you need Javascript enabled to view it . For more information about the nominations process, please see www.ifac.org/NominatingCommittee

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IFAC Presses for Action to Adopt and Implement Global Financial Standards

(Washington, D.C./November 19, 2009) – The International Federation of Accountants' (IFAC) 32nd annual Council meeting in Washington, D.C., this week emphasized the urgency of achieving global adoption and implementation of financial standards, especially for accounting and auditing.

Robert L. Bunting, IFAC President, says, “There is no high-quality information without the work of accountants—and certainly no way forward from the global financial crisis without it. What we need is a level playing field in financial reporting. What we do not need is trans-Atlantic accounting arbitrage and political interference in the technical aspects of standard setting. Governments, standard setters, and the accounting profession need to collaborate closely if common high-quality standards in accounting and auditing are to be established, adopted, and well implemented. And that includes accounting standards for governments, many of which have become major investors in the private sector during the crisis.”

IFAC’s Chief Executive Officer, Ian Ball, adds that IFAC’s work in delivering this message to its members and their governments is increasingly important. “We have expressed the importance of global accounting and auditing standards to the G-20 twice this year—before the Leaders’ Summits in London and Pittsburgh—and believe that now is the time for action at the country level if we are to achieve what was agreed by the G-20.”

These messages were reiterated frequently in workshops and seminars during IFAC’s two-day event, hosted by the American Institute of Certified Public Accountants.

The Council’s formal deliberations included approval of IFAC’s strategic actions for the coming year, which include:

· continuing development of auditing, ethical, accounting education, and public sector accounting standards that meet the public interest;

· promoting the adoption and implementation of these standards;

· exercising IFAC’s voice for the global accountancy profession, including input to the G-20 and other key international organizations; and

· addressing the needs of small- and medium-sized entities (SMEs) and seeking to avoid excessive regulatory burdens being placed on this critical economic sector.

The Council approved three new member bodies: Iranian Association of Certified Public Accountants (IACPA); Latvian Association of Certified Auditors (LACA); and Society of Certified Accountant and Auditors of Kosovo (SCAAK).

In addition, two associates were approved: Brunei Darussalam Institute of Certified Public Accountants (BICPA); and Ordre des Experts-Comptables du Luxembourg (OEC). The Council also gave affiliate status to the National Association of State Boards of Accountancy (NASBA) from the United States.

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Reliable Investing Information More Important Than Ever to Man-in-the-Street, IFAC Executives Tell Reporters at National Press Club

(Washington, D.C./November 16, 2009)—Individual investors deserve better quality financial information—top executives from the International Federation of Accountants (IFAC) told reporters at a briefing session this morning at the National Press Club—and having common global standards is one way to get it.

“Why should individual investors care about global standards?” asks Robert Bunting, IFAC President, asserting that standards level the playing field—so that the kind of information individuals receive about an investment in one part of the world is as reliable as what they receive in another. He explains that his organization’s 157 member bodies in 123 countries continue to work toward implementing international standards in auditing, public and private sector accounting, and ethics.

Ian Ball, IFAC’s Chief Executive Officer, adds that common international public sector accounting standards (as set by IFAC’s independent International Public Sector Accounting Standards Board [IPSASB]) are also critical to enhancing the quality of government financial reporting. This was why IFAC recommended to the G-20’s summit in Pittsburgh in September that the Leaders should back global adoption of public sector standards, says Ball. “It’s not just making decisions to invest in government securities where this makes a difference. To the ‘man-on-the-street,’ public sector standards deliver information about a government’s use of taxpayer funds,” he adds.

Another issue Mr. Bunting addressed in the briefing is the importance of small and medium enterprises (SMEs) as the engine of the global economy—the primary source of new jobs, innovation, and growth. Financial regulation should not place unreasonable obstacles in the path of SMEs—such regulation can stifle their growth.

The briefing session at the National Press Club was part of the activities surrounding IFAC’s annual Council Meeting, an event attended by presidents and chief executives of professional accounting institutes from around the world.

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November 13, 2009

We welcome your comments.

In This Issue:

Features
1. IFAC/The Banker Survey Examines SME Lending, Critical Role of Accountants
2. Other Organizations Provide Evidence on SME Access to Finance

News from IFAC
3. IFAC Hosts SMP Forum in Beijing
4. IAASB Releases New Tools to Support Clarity ISA Adoption and Implementation
5. Adoption and Implementation Materials for Revised Ethics Code Now Available
6. Update on SMP Support Documents

More News from Around the Globe
7. ICAEW Launches Clarity Resource ISA Audit 2010
8. EU Consultation on the Review of the Fourth and Seventh Company Law Directives
9. IFRS for SMEs Update
10. Share SMP eNews with Your Colleagues
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Features

1. IFAC/The Banker Survey Examines SME Lending, Critical Role of Accountants

IFAC and The Banker magazine, part of the Financial Times group, have released the results of a global survey of banks on lending to small- and medium-sized entities (SMEs). The results showed that some SMEs may have access to more credit down the road, but will have to pass more rigorous tests to demonstrate their creditworthiness. The results of the survey, which received responses from over 500 bankers over a six-week period, also confirmed that accountants play a critical role in providing information that influences lender decision making.

Bankers expect SMEs to provide more comprehensive information in their loan applications. Survey respondents said that they will increasingly look at cash-flow information, collateral, and customer history with the bank when considering loan applications. Financial statements, key risk indicators, and industry trends are also among the key sets of information banks focus upon when making loan decisions.

The survey results were printed in a special supplement in the October issue of The Banker. Included with the results were articles written by IFAC President Robert Bunting, CEO Ian Ball, and SMP Committee Chair Sylvia Voghel, which reflect upon the role of the accounting profession, particularly SMPs, in this lending sector. The articles and survey results can also be accessed from the IFAC website at www.ifac.org/financial-crisis/smp-sme-resources.php or at www.ifac.org/smp.

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2. Other Organizations Provide Evidence on SME Access to Finance

A number of other projects conducted by member bodies and other organizations echo the findings of the IFAC survey:

Member Bodies

The Association of Chartered Certified Accountants (ACCA), CPA Australia, and the Certified General Accountants Association of Canada (CGA-Canada) have sponsored research by the Economist Intelligence Unit, titled Access to Finance for the Small and Medium Sized Enterprise Sector: Evidence and Conclusions, which explored the problems facing SMEs in accessing finance from banks and other lenders. Based on that research and other recent studies, the accounting bodies have called for continued support for SMEs, noting that unless this sector has the confidence to resume hiring and investing, the global recovery could prove fragile.
See www.cga-canada.org, www.accaglobal.com, and www.cpaaustralia.com.au.
The Institute of Chartered Accountants in England and Wales (ICAEW) issued its SME Access to Finance Report. Produced with Ipsos MORI, an independent market research agency, in May and June 2009, this forward-looking research polled senior partners from large and small accounting and audit firms. It concludes, "Our report finds that senior accounting partners expect an upturn in demand for credit in the SME sector over the next 6-12 months. Policy makers, therefore, have a narrowing window of opportunity to address supply-side problems in the credit market."
Other Organizations

In the US, the Federal Reserve released the results of the October 2009 Senior Loan Officer Opinion Survey on Bank Lending Practice, in which banks indicated that they continued to tighten standards and terms over the past three months on all major types of loans to businesses and households.
The Organisation for Economic Co-operation and Development (OECD) in its July 2009 study, The Impact of the Global Crisis on SME and Entrepreneurship Financing and Policy Responses, reported that "access to financing continues to be one of the most significant challenges for the creation, survival, and growth of SMEs, especially innovative ones. The problem is strongly exacerbated by the financial and economic crisis." The OECD concluded, "The present report brings to the attention of governments recommendations to tackle the long-standing deficiencies in the SME financial environment, as well as to prepare SMEs and entrepreneurs for a phase of innovation-led growth."
European SMEs face similar problems accessing finance as revealed by an SME finance survey, conducted by the UEAPME, the European craft and SMEs employers' organization. The study was based on national SME finance surveys conducted by national associations representing craft, trade, and other SMEs in Europe. The study reveals that while access to finance for SMEs in May/June 2009 was significantly worse than a year before, it is slightly better than earlier this year (February/March 2009).
Together, the evidence suggests SMEs in most jurisdictions continue to face difficulty in accessing finance. Given the importance of SMEs as engines of economic growth and innovation, this dearth of credit threatens to undermine economic recovery in many countries. The surveys also stress the significant role that professional accountants can play in helping SMEs gain access to finance.

IFAC has also dedicated resources to help SMPs and SMEs cope with the economic downturn. These resources are located in the section of the IFAC website devoted to the global financial crisis and the Resources section of the International Center for SMPs at www.ifac.org/smp.

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News from IFAC

3. IFAC Hosts SMP Forum in Beijing

The Small and Medium Practices (SMP) Committee held is fourth annual IFAC SMP Forum at the Grand Hyatt, Beijing. Over 200 delegates from more than 40 countries--the largest gathering in the event's history--attended the event, which was co-hosted by the Chinese Institute of Certified Public Accountants and the Confederation of Asian and Pacific Accountants.

The Forum's program featured a broad range of speakers and topics, including recent international developments, the work of the IFAC SMP Committee, as well as presentations by the World Bank and Asian Development Bank, and panel discussions on such topics as "Adapting to the Economic Turbulence and Laying Foundations for Sustainable Growth"; "Ensuring International Standards are Relevant to SMP/SMEs"; and "The Role of SMPs in Providing Business Support to SMEs."

A full set of materials related to the Forum, including streaming video, speeches, presentations, and discussion group reports will be available soon at the SMP Committee Resources web page: www.ifac.org/smp/index.php#Resources.

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4. IAASB Releases New Tools to Support Clarity ISA Adoption and Implementation

To promote awareness and understanding of the Clarified International Standards on Auditing (ISAs), which were completed in March 2009, the International Auditing and Assurance Standards Board (IAASB) has released a series of non-authoritative modules to support adoption and implementation efforts.

Each "ISA Module" consists of a brief video presentation, a set of slides, and supporting notes that explain the key principles of, and major changes in, individual ISAs. The support modules include the implications for audits of small- and medium-sized entities.

The ISA Modules are available to download free of charge from the IAASB Clarity Center on the IFAC website: http://web.ifac.org/clarity-center/support-and-guidance. These can also be accessed through the Resources section of the International Center for SMPs: www.ifac.org/smp.

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5. Adoption and Implementation Materials for Revised Ethics Code Now Available

The International Ethics Standards Board for Accountants (IESBA) encourages member bodies and firms to develop plans for implementing the recently revised Code of Ethics for Professional Accountants (the Code). The revisions include strengthening the Code's independence requirements and using the word "shall" as a drafting convention to clarify requirements. The revised Code will take effect January 1, 2011.

The IESBA has developed the following resources to support adoption and implementation:

Slide Presentations: High level and in-depth that can be used to explain the content of the Code
Overview of Independence Requirements: A short document providing an overview of the independence requirements contained in Section 290 of the Code relating to rotation, cooling off period, provision of non-assurance services, fees, and compensation and evaluation policies
Comparisons: A high level and more detailed comparison that will help people understand the differences between the July 2009 Code and the previous Code
Template: A comparison template containing the complete text of the Code, which can assist individuals who want to understand how the provisions in their jurisdiction match up to the Code
To access these materials, as well as the revised Code, visit the Resources section of the Ethics homepage: www.ifac.org/Ethics. A paper explaining application of the new Code to SMPs is in development.

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6. Update on SMP Support Documents

Much more support is on the way for SMPs in 2010 from the SMP Committee as follows:

An updated Guide to Using International Standards on Auditing in the Audits of Small- and Medium-sized Entities (ISA Guide) is scheduled for launch in April 2010. The updated ISA Guide will feature many improvements and conform to the newly clarified ISAs. Designed to help practitioners efficiently apply ISAs to audits of SMEs, the updated ISA Guide will comprise two volumes: Volume 1 will describe the basic concepts of a risk-based audit in conformance with ISAs and as such be directed at practitioners and students with little or no understanding of ISAs; and Volume 2 will set out the practical guidance for the audit of SMEs and as such be targeted at practitioners with a reasonable working knowledge of ISAs.
A new Guide to Practice Management for Use by Small- and Medium-sized Practices (PM Guide) is expected in the second quarter, 2010. Under development by CPA Australia, the PM Guide is intended to help SMPs operate proficiently and profitably as well as enhance their responsiveness to the needs of their clients. The PM Guide will include practical guidance, case studies, and checklists.
An updated Guide to Quality Control for Use by Small- and Medium-sized Practices (QC Guide) is scheduled for issue in the third quarter, 2010. Designed to help SMPs understand and efficiently apply the recently redrafted International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements, the updated QC Guide will conform to the revised Code of Ethics and include other enhancements.
The information paper, the Role of SMPs in Providing Business Support to SMEs, is expected to be released in the second quarter, 2010. The paper will provide guidance on how SMPs can better provide business support to SME clients.
All SMP Committee documents can be accessed at www.ifac.org/SMP/index.php#Resources.

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More News from Around the Globe

7. ICAEW Launches Clarity Resource ISA Audit 2010

The Institute of Chartered Accountants in England and Wales (ICAEW) has launched a website, ISA Audit 2010, providing news, information, and resources to help with the implementation of International Standards on Auditing (ISAs) in the UK.

The launch of this website resource is timely since the UK Auditing Practices Board recently decided to adopt the Clarified ISAs (see www.frc.org.uk/apb/press/pub2131.html).

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8. EU Consultation on the Review of the Fourth and Seventh Company Law Directives

The European Union (EU) is conducting a consultation on its review of the Fourth and Seventh Company Law Directives. This project is the third step in the simplification of accounting rules for SMEs and other companies in the scope of the Fourth and Seventh Company Law Directives ("Accounting Directives"), which began with a fast-track proposal in 2008. A Member State option to create a new "micro" entity category in order to exempt them from the accounting requirements under the Fourth Directive is being proposed by the European Commission, simultaneously with the launch of a stakeholder consultation.

The current consultation aims to raise issues relating to the modernization and simplification of the Accounting Directives. Positive effects of the review will include a reduction of burden mainly for small companies, as well as qualitative improvements for all companies within the scope of these Directives. An additional objective is to increase the clarity of the text for lawmakers and users in general. Following an analysis of the comments received to the consultation paper, a legislative proposal will be presented by the end of 2009.

A report summarizing the results from the consultation and the next steps can be seen at http://ec.europa.eu/internal_market/consultations/2009/company_law_dir_en.htm. The Commission Services received just over one hundred original responses to the consultation, representing a full spectrum of European stakeholders. Respondents welcomed the public consultation and expressed a desire for increased debate on accounting developments.

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9. IFRS for SMEs Update

On July 9, 2009 the International Accounting Standards Board (IASB) issued its International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). IFAC strongly supports the new standard (see www.ifac.org/MediaCenter/?q=node/view/658) and is committed to supporting its timely widespread adoption.

Already over 40 countries have signaled an intention, or are known to have already, adopted the standard. One of the standard's many benefits is its potential to help SMEs gain access to finance. To support the implementation of the IFRS for SMEs, the International Accounting Standards Committee Foundation (IASCF) is developing comprehensive training material. The training material will be published in a number of languages. The English language material will be downloadable free of charge at http://www.iasb.org/Education/Education.htm in late 2009.

The Foundation is also working with international development agencies to provide instructors for regional workshops to "train the trainers" in the use of the training material, particularly within developing and emerging economies. Member bodies and other organizations interested in knowing more should contact Michael Wells, Director IFRS Education Initiative, This email address is being protected from spam bots, you need Javascript enabled to view it .

Meanwhile, IFAC is encouraging its member bodies and regional organizations to consider running training workshop(s) using the material and is keen to hear from those organizations organizing such workshops so we may assist in its promotion: please email Paul Thompson ( This email address is being protected from spam bots, you need Javascript enabled to view it ) with details.

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10. Share SMP eNews with Your Colleagues

The SMP Committee issues regular eNews updates to keep you current on its activities and recent publications and developments by IFAC members and other organizations. Please forward this eNews to any interested colleagues and advise them that they can subscribe to receive this eNews by following these simple steps:

Go to the eNews sign-up page at www.ifac.org/E-news/index.tmpl.
Enter your email address, name, and country.
Select "SMP eNews" from the checklist, as well as any other eNews alerts that you would like to receive.

IAASB Staff Practice Alert Helps Auditors Plan More Effective Use of External Confirmations

(New York/November 5, 2009) – External confirmation procedures can be a compelling tool in obtaining relevant and reliable evidence for audits of financial statements. Recent experience, however, highlights the need for auditors to pay particular attention to circumstances that may affect the planned use of confirmations, including the risk of fraud and the adequacy of evidence.

To raise awareness of potential issues and to help auditors use external confirmation procedures more effectively, the staff of the International Auditing and Assurance Standards Board (IAASB) has released today a new audit practice alert. Titled Emerging Practice Issues Regarding the Use of External Confirmations in an Audit of Financial Statements, the alert highlights areas within the International Standards on Auditing (ISAs) that are particularly relevant when deciding to request external confirmations, designing and carrying out confirmation procedures, and evaluating responses received. The alert also raises awareness of potential issues that may surface from the increasing use of technology in the confirmation process and the use of restrictive language by respondents.

James Gunn, IAASB Technical Director, explains, “Requesting external confirmations is a commonly used audit procedure in an audit of financial statements. Today’s environment, however, reinforces the need for professional skepticism and professional judgment in all aspects of an audit, including the use of confirmations. The alert reminds auditors of the need to maintain control over the confirmation process, and to remain alert to circumstances that may undermine its effectiveness.”

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IFAC Releases New Tool that Gauges ISA Adoption

(New York/November 3, 2009) – Adoption of international standards on auditing (ISAs) is well underway, according to the newly released online chart from the International Federation of Accountants (IFAC). Compiled from information gathered by the IFAC Member Body Compliance Program, the chart indicates that ISAs as issued by the International Auditing and Assurance Standards Board (IAASB) have been adopted or otherwise used as the basis of national standards in 126 jurisdictions around the world.

“This tool gives an overview of ISA adoption by jurisdiction, as well as other valuable information about how the adoption process can vary,” comments Russell Guthrie, IFAC Director, Quality and Member Relations. “It also demonstrates the commitment of IFAC and its member bodies to transparency by providing a comprehensive summary of ISA adoption to our stakeholders and welcoming feedback that will allow further refinement of the information, especially as jurisdictions adopt the recently issued Clarified ISAs, which are a result of a comprehensive program to enhance the clarity of auditing standards,” he concludes.

Adoption of international standards is the first step of a continuous process, following which successful implementation is vital to ensure professionals understand and apply the standards appropriately. IFAC member organizations are required to use their best endeavors to lead or actively support that process within their countries. They communicate this commitment through their Compliance Action Plans that describe the current status of adoption and their planned activities to progress implementation.

In line with the ongoing nature of the adoption process, the chart and notes, gathered from the Compliance Program and a variety of other sources, will be periodically updated as new information is received.

About IFAC

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.

About IFAC Member Body Compliance Program

The IFAC Member Body Compliance Program (www.ifac.org/ComplianceProgram) was launched in 2004 as an integral part of the 2003 IFAC reforms. The primary emphasis of the Program is to encourage continuous improvement by professional accountancy organizations through an ongoing assessment of their commitment to use best endeavors to adopt and support implementation of international financial reporting, auditing, ethical, education, and public sector accounting standards, as well as to operate or otherwise support robust quality assurance and investigation and disciplinary mechanisms. The Program, in particular through the Action Plan process, serves as an engine to drive behavior to achieve the successful adoption and implementation of international standards and best practices, either through the direct actions of IFAC members and associates or through their encouragement and advocacy to other stakeholders with the authority to initiate change in their jurisdictions. To date, 62 Action Plans have been published on the IFAC website and more than 50 drafts have been submitted for review and finalization.

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IFAC Forum in Beijing Addresses Needs and Solutions for Small and Medium Practices and their SME Clients

(Beijing, PRC/October 30, 2009) – Over 200 delegates from more than 40 countries gathered in Beijing for the fourth annual IFAC SMP Forum (www.ifac.org/smp/index.php#Resources) of the International Federation of Accountants (IFAC) Small and Medium Practices (SMP) Committee—making it the largest gathering in the event’s history. Co-hosted by the Chinese Institute of Certified Public Accountants (CICPA) and the Confederation of Asian and Pacific Accountants (CAPA), the conference covered topics ranging from how to accomplish sustainable growth during economic turbulence to ensuring that international standards are relevant to SMEs/SMPs, and included presentations from the World Bank and the Asian Development Bank.

In greeting attendees, IFAC’s President Robert L. Bunting spoke of the CICPA as “an active and much-appreciated member of IFAC” and complimented its role in adopting and implementing international standards in China. This includes convergence of Chinese Accounting Standards (CAS) and International Financial Reporting Standards (IFRS) and accelerating plans to accept the recently issued clarified International Standards on Auditing (ISAs) from the International Auditing and Assurance Standards Board.

Turning his subject toward the global economic crisis, Mr. Bunting said, “I realize that, here in China, the story has been somewhat different; indeed your country has been a source of continued growth and contributed to the world economy’s recovery. But because of the global nature of our business environment, your business sector has suffered from many of the same problems as other countries, relating to employment and general financial woes.

“And when a country suffers, chances are very good that SMEs, and the SMPs that support them, suffer more than the average. That is why this year’s Forum is so critical,” Mr. Bunting said. “Yes, IFAC understands that SMEs are engines for economic growth and ideas—but we also know that the SMPs who work with them are the first ‘go-to partners’ for these entrepreneurs, with the knowledge of the issues they face and how they can be addressed. And that is why IFAC supports them as they help SMEs create a vision for change.” He then spoke of the recent SME lending survey conducted by IFAC with The Banker magazine. It found that lenders were “highly influenced” by loan-applicant-SMEs who had external accountants providing assurance services and/or financial advice.

According to Sylvie Voghel, Chair, SMP Committee, “This event has provided a unique setting for representatives from IFAC member bodies, recognized regional organizations, acknowledged accountancy groupings, and other accountancy organizations and guests to exchange ideas.” She added, “The result was impressive—new insights on ways for IFAC and the international profession to respond to a wide range of issues currently facing SMPs and SMEs, both in China, the world’s most populous nation, and globally.”

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30 October 2009
In this issue:
1. IFAC Accountancy Summit Supports G-20 Response to Financial Crisis
2. IFAC/The Banker Survey Examines SME Lending, Critical Role of Accountants
3. IFAC Hosts SMP Forum in Beijing
4. IAASB Releases New Tools to Support Clarity ISA Adoption and Implementation
5. IAASB Staff Issues Q&A Guide on Clarified ISA Implementation, SME Issues
6. IAASB Consults on Complex Financial Instruments, Greenhouse Gas Emissions
7. Adoption and Implementation Materials for Revised Ethics Code Now Available
8. IPSASB/IMF Joint Task Force Achieves Progress
9. IFAC/PAIB Collaborating with Prince of Wales Sustainability Project on Community Site
10. PAIB Issues International Good Practice Guidance on Evaluating and Improving Costing
11. PAIB Launches Projects on Governance, Risk, and International Control
12. IOSCO Issues Statement Supporting Clarity ISAs
13. Forum of Firms Workshop Focuses on Strengthening Global Internal Inspection Processes
14. Member Bodies Invited to Rate Competitors in 2009 Articles of Merit Competition
15. IFAC and International Valuation Standards Council Sign MOU Agreement
16. Third Annual CReCER Conference Addresses Crisis, SMEs, and Public Sector Reporting
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1. IFAC Accountancy Summit Supports G-20 Response to Financial Crisis

Following the Pittsburgh G-20 Summit held on September 24-25, IFAC expressed support for the G-20's goal to establish "a framework for strong, sustainable, and balanced growth," which includes reform of executive compensation packages, the adoption of a single set of high-quality global accounting standards, and increased resources for the World Bank and international development banks. IFAC recommends that these goals remain priorities and that G-20 leaders act on them at a national level.

In advance of the Pittsburgh G-20 meeting, IFAC hosted in July the G-20 Accountancy Summit, which was attended by over 60 representatives from member bodies in the G-20 countries and other external groups. The Accountancy Summit was designed to generate consensus within the profession on a series of recommendations submitted to the G-20 finance ministers. The Summit also addressed the question of how the profession can best contribute to resolving the financial crisis. The recommendations, if implemented, are designed to strengthen transparency and accountability within the global financial system.

The following recommendations, among others, were developed at the G-20 Accountancy Summit:

The early adoption and implementation of International Financial Reporting Standards (IFRS), International Standards on Auditing (ISAs), and the auditor independence requirements set out in the Code of Ethics for Professional Accountants
Stronger corporate governance structures
Widespread adoption of International Public Sector Accounting Standards (IPSASs) by government
Greater consideration of the needs of small- and medium-sized entities
The full list of these recommendations also can be accessed via IFAC's web page devoted to the Global Financial Crisis: www.ifac.org/financial-crisis. The results of the G-20 Summit can be accessed here: pittsburghsummit.gov.

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2. IFAC/The Banker Survey Examines SME Lending, Critical Role of Accountants

The results of the survey, which received responses from over 500 bankers over a six-week period, also confirmed that accountants play a critical role in providing information that influences lender decision making. Bankers expect SMEs to provide more comprehensive information in their loan applications. Survey respondents said that they will increasingly look at cash-flow information, collateral, and customer history with the bank when considering loan applications. Financial statements, key risk indicators, and industry trends are also among the key sets of information banks focus upon when making loan decisions.

The survey results, including three articles by IFAC leadership that highlight IFAC's support for SMEs and IFAC's belief in the importance of SMEs in contributing to global economic recovery and growth, are printed as a special supplement in the October issue of The Banker. The articles and survey results can also be accessed from the IFAC website: www.ifac.org/financial-crisis/smp-sme-resources.php.

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3. IFAC Hosts SMP Forum in Beijing

The Forum's program featured a broad range of speakers and topics, including recent international developments, the work of the IFAC SMP Committee, as well as presentations by the World Bank and Asian Development Bank, and panel discussions on such topics as "Adapting to the Economic Turbulence and Laying Foundations for Sustainable Growth"; "Ensuring International Standards are Relevant to SMP/SMEss"; and "The Role of SMPs in Providing Business Support to SMEs."

A full set of materials related to the Forum, including streaming video, speeches, presentations, and discussion group reports will be available at the SMP Committee Resources web page: www.ifac.org/smp/index.php#Resources.

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4. IAASB Releases New Tools to Support Clarity ISA Adoption and Implementation

To promote awareness and understanding of the clarified International Standards on Auditing (ISAs), which were completed in March 2009, the International Auditing and Assurance Standards Board (IAASB) has released a series of modules to support adoption and implementation efforts.

The ISA Modules are available to download free of charge from the IAASB Clarity Center on the IFAC website: http://web.ifac.org/clarity-center/support-and-guidance.

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5. IAASB Staff Issues Q&A Guide on Clarified ISA Implementation, SME Issues

To help auditors worldwide implement the clarified International Standards on Auditing (ISAs), the staff of the International Auditing and Assurance Standards Board (IAASB) has developed a question-and-answer publication titled Applying ISAs Proportionately with the Size and Complexity of an Entity.

The questions and answers explain how the design of the ISAs enables them to be applied in a manner that is proportionate to the specific characteristics of the entity subject to audit. Furthermore, answers are given to questions relating to audit procedures, work effort, documentation, and professional judgment. It is relevant in the context of any audit, but will be of particular help to those who audit, or oversee the audits of, small- and medium-sized entities.

The publication is available for download free of charge from the IFAC website: http://web.ifac.org/clarity-center/support-and-guidance.

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6. IAASB Consults on Complex Financial Instruments, Greenhouse Gas Emissions

The International Auditing and Assurance Standards Board (IAASB) has released Consultation Papers seeking views on developing new guidance for auditing complex instruments and greenhouse gas emissions reporting.

The first Consultation Paper, entitled Auditing Complex Financial Instruments, recognizes the strong demand from auditors and preparers for further guidance on auditing complex financial instruments, e.g., in situations of illiquid markets, which currently pose the greatest challenges for them. The Consultation Paper refers to recent work by the U.K. Auditing Practices Board (APB) on the same topic, and asks specific questions about how that guidance might be adapted or supplemented for application in the international context.

Comments for this paper are requested by January 15, 2010.

The second paper, titled Assurance on a Greenhouse Gas Statement, asks a number questions in important areas related to the reporting of greenhouse gas emissions, including the following:

The form of assurance report that users would find most useful
The nature and extent of requirements
How a standard should best integrate with regulatory requirements
Technical aspects of applying the assurance process to greenhouse gas emissions
The IAASB intends to use the feedback from this consultation to develop an exposure draft of a proposed new assurance standard on greenhouse gas emission statements for release in 2010.

Comments for this paper are requested by February 19, 2009.

Both Consultation Papers may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the "Submit a Comment" link on the Exposure Drafts and Consultation Papers page. Please note that first-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to This email address is being protected from spam bots, you need Javascript enabled to view it .

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7. Adoption and Implementation Materials for Revised Ethics Code Now Available

The IESBA has developed the following resources to support adoption and implementation:

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8. IPSASB/IMF Joint Task Force Achieves Progress

Momentum is building for the joint task force developed by the International Public Sector Accounting Standards Board (IPSASB) and the International Monetary Fund (IMF) to discuss intervention activities conducted by various governments in response to the global financial crisis. The task force is also considering the application of accounting standards for reporting such actions.

The task force has three objectives:
1) To learn how governments are intending to deal with assets, obligations, and commitments acquired as a result of their actions in response to the financial crisis
2) To learn about, and identify the need for any improvements to, accounting standards developed to account for government actions in response to the financial crisis
3) To discuss reporting and valuation approaches for reporting these interventions

The task force has held meetings with five important sets of stakeholders and updated the IPSASB on its progress. It will provide the Board with a draft document summarizing its conclusions on October 31, 2009.

To learn more about the activities of the IPSASB, please visit www.ifac.org/PublicSector.

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9. IFAC/PAIB Collaborating with Prince of Wales Sustainability Project on Community Site

IFAC and the Professional Accountants in Business (PAIB) Committee continue to collaborate with The Prince of Wales' Accounting for Sustainability (A4S) Project, which has the aim of achieving a common approach to accounting for sustainability across the accountancy profession.

Currently, IFAC and A4S have partnered to develop a community website that will allow accountancy organizations, professionals, and other experts to share ideas, experiences, and views on sustainability issues. The site will also allow participants to work together on a variety of different projects, including case studies, content development, and broader com¬munity outreach to stakeholders, such as investors, academics, and regulators.

Progress on the development of this site will be reported in future IFAC news vehicles.

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10. PAIB Issues International Good Practice Guidance on Evaluating and Improving Costing

The Professional Accountants in Business (PAIB) Committee has published new International Good Practice Guidance (IGPG) to help professional accountants make decisions about their approaches to costing.

The IGPG, titled Evaluating and Improving Costing in Organizations, establishes six fundamental principles for evaluating and improving costing methods.

The guidance is targeted to professionals working in commerce, industry, as well as the public sector. It also recognizes the importance of distinguishing between the purposes and information needs of cost accounting to meet the demands of external reporting, cost measurement, and reporting for internal decision support in organizations.

A companion document for the guidance, titled Evaluating the Costing Journey: A Costing Levels Continuum Maturity Model, has also been published to help professional accountants decide upon the level of sophistication in the costing information they will need to provide, given the requirements of their organizations and the needs of managers and employees. The model can help professional accountants exercise professional judgment to assess their organization's existing costing capabilities. IFAC welcomes comments on this model, which is a beta version currently being tested by users for its effectiveness.

Both documents can be downloaded free of charge from the PAIB section of the IFAC online bookstore at www.ifac.org/Store.

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11. PAIB Launches Projects on Governance, Risk, and International Control

The Professional Accountants in Business (PAIB) Committee has launched two projects directed at improving guidance in the areas of governance, risk, and internal control.

The first initiative will involve developing a reconciliation of the PAIB Committee's International Good Practice Guidance (IGPG) principles with the OECD Principles of Corporate Governance. This project follows IFAC's recent publication of the IGPG, Evaluating and Improving Governance in Organizations, and IFAC's July submission to the G-20, which identifies corporate governance as a priority for reform.

IFAC's IGPG on governance complements the Organization for Economic Co-operation and Development (OECD) principles as its main purpose is to support PAIBs and to help their organizations evaluate and further improve their governance structures and systems. The IFAC principles help restore the balance between compliance and performance in organizations.

The PAIB Committee is also developing the IGPG, Evaluating and Improving Internal Control in Organizations. The goal will be to provide practical guidance that will focus on common pitfalls in the way current internal control systems are being deployed and what should be done to avoid these pitfalls.

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12. IOSCO Issues Statement Supporting Clarity ISAs

The International Organization of Securities Commissions (IOSCO) recognized the important role that International Standards on Auditing (ISAs) play in "facilitating cross-border securities offerings and listings" in a statement.

In the statement, IOSCO encouraged securities regulators to accept audits performed and reported in accordance with the clarified ISAs for cross-border offerings and listings. However, IOSCO recognized that the decision whether to do so will depend on a number of factors and circumstances in their jurisdiction. Furthermore, IOSCO noted the potential role of the clarified ISAs for purely domestic offerings and listings. Consequently, it encourages securities regulators and relevant authorities to consider the clarified ISAs when setting auditing standards for national purposes. However, IOSCO also recognizes that factors at the national and regional level will be relevant to their considerations.

IFAC welcomes the statement, which echoes support for ISAs recently expressed by the World Bank and the Basel Committee on Banking Supervision.

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13. Forum of Firms Workshop Focuses on Strengthening Global Internal Inspection Processes

Over 40 senior audit professionals from 23 international networks of accounting firms met to share their experiences, industry insights, and current practices in establishing and strengthening global internal inspection processes at a workshop recently organized by the Forum of Firms (the Forum).

The workshop featured a panel of experts who discussed new developments and innovations in a variety of areas, including inspection organization, methodology and staffing, practical implementation issues, and processes for internal reporting.

In order to achieve and maintain membership in the Forum, each member firm must follow international professional standards on quality control at the firm level and for each transnational audit engagement.

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14. Member Bodies Invited to Rate Competitors in 2009 Articles of Merit Competition

The Professional Accountants in Business (PAIB) Committee has invited professional accountants in business and business leaders to participate in selecting the winner of its 2009 Articles of Merit Award Program. The program seeks to identify commendable articles on financial and management accounting topics that appeared in publications of IFAC member bodies and associates. This year, the PAIB Committee judging panel has nominated 35 articles for the top award.

To view and rate the articles, please see http://web.ifac.org/PAIB/articles-of-merit-2009 before November 15, 2009. The winning article will be announced at the end of the year.

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15. IFAC and International Valuation Standards Council Sign MOU Agreement

IFAC and the International Valuation Standards Council (IVSC) have signed a Memorandum of Understanding (MoU) to enhance their respective impacts on issues surrounding valuations--particularly those related to improving the consistency of global valuation standards affecting the preparation and audits of financial reports.

IFAC and the IVSC will seek collaboration opportunities in areas of common interest, including improving the mutual understanding of valuers and auditors, of standards in relation to financial statements and the auditors' use of experts, and promoting the credibility and acceptability of valuations prepared in accordance with International Valuation Standards. As part of this collaboration, the IVSC has appointed Frank Bollman to serve on the Consultative Advisory Group of the International Auditing and Assurance Standards Board. Mr. Bollman is Managing Director in the European Practice of Duff & Phelps GmbH.

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16. Third Annual CReCER Conference Addresses Crisis, SMEs and Public Sector Reporting

The 3rd Annual CReCER (Spanish acronym for Accounting and Accountability for Regional Economic Growth) Conference took place September 23-25 in São Paulo, Brazil. The event, hosted by IFAC, the World Bank, and the Inter-American Development Bank, along with the support of the six largest global accounting networks, was attended by over 1,000 individuals.

The conference is designed to increase awareness of the critical importance of sound financial reporting and auditing for the development of a well-functioning market economy and of an efficient public sector. This year, the conference provided specific perspectives on the global financial crisis.

IFAC President Robert Bunting spoke at the conference, advocating a leadership role for the accounting profession in helping to lead the world out of the financial crisis. He emphasized the importance of supporting small- and medium-sized businesses and the accountancy firms that serve them in recovery from the recession. In addition, he called for governments to adhere to the same high standards of financial reporting as their private sector counterparts.

To learn more about the conference, please see the CReCER website: www.creceramericas.org/home.

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IAASB Issues Consultation Paper to Enhance Reporting on Greenhouse Gases

(New York/October 22, 2009) – As the world turns its attention to the Copenhagen talks later this year for a successor to the Kyoto Protocol on reining in carbon emissions and other greenhouse gases (GHG), the International Auditing and Assurance Standards Board (IAASB) is making significant progress to develop a new assurance standard on GHG statements. Today, the IAASB released a Consultation Paper seeking views on key issues in developing that standard.

“Having reliable information is key to global efforts to reduce emissions and stabilize the level of carbon in the atmosphere,” emphasizes Arnold Schilder, IAASB Chairman. “We are actively seeking to enhance the credibility of GHG information because of the importance to the public interest of decisions being made on the basis of that information. Our consultation will help inform the development of a robust standard in support of this goal.”

“A growing number of countries are developing, or have developed, carbon emissions trading schemes under which public reporting of information about emissions inventories, and assurance thereon, has economic, political, and social significance,” explains James Gunn, IAASB Technical Director, adding, “The IAASB’s project seeks to enhance the consistency and quality of performance by practitioners on assurance engagements to report on this information, whether produced for regulators, legislators, investors, or other interested parties.”

Entitled Assurance on a Greenhouse Gas Statement, the Consultation Paper asks a series of questions addressing such matters as: the form of assurance report that users would find most useful; the nature and extent of requirements; how a standard should best integrate with regulatory requirements; and technical aspects of applying the assurance process to GHG emissions. The IAASB intends to use the feedback from the consultation to develop an exposure draft of a proposed new assurance standard on GHG statements for release in 2010.

All stakeholders are encouraged to respond to the Consultation Paper, either in its entirety or to select questions that are of special interest to them.

How to Comment

Comments on the Consultation Paper are requested by February 19, 2010. The Consultation Paper may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the "Submit a Comment" link on the Exposure Drafts and Consultation Papers page. Please note that first-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IAASB Technical Director at +1 (212) 856-9420 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

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IFAC INVites PROFESSIONAL ACCOUNTANTS to HELP SELECT winner of 2009 Articles of Merit award

(New York/October 19, 2009) – The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) invites accountancy professionals in all areas of business and government to participate in selecting the winner of its 2009 Articles of Merit Award Program. The program seeks to identify and promote outstanding articles on financial and management accounting topics that have appeared in publications of IFAC’s 157 member bodies and associates.

The PAIB Committee serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, the public sector, education, and the not-for-profit sector. The committee facilitates the global development and sharing of knowledge, develops good practice guidance, and promotes the roles and domain of professional accountants in business.

“Our Articles of Merit Program is an excellent way for IFAC members—whose professionals are in a prime position to reflect on issues of relevance to professional accountants in today’s environment—to share their experiences with colleagues around the world,” states Roger Tabor, Chair, PAIB Committee.

Readers are invited to rate 35 articles competing for this year’s award. They cover a broad range of issues affecting PAIBs and business in general, including governance and risk management, managing through the financial crisis, accounting for sustainability, raising finance, managing cash flow, and financial reporting, among others. This input will be used to support the PAIB Committee judging panel in selecting the winning article and runners-up. To view and rate the articles, please see web.ifac.org/PAIB/articles-of-merit-2009 before November 15, 2009.

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IAASB SEEKS VIEWS ON AUDITING COMPLEX FINANCIAL INSTRUMENTS

(New York/October 16, 2009) – The International Auditing and Assurance Standards Board (IAASB) has released a Consultation Paper seeking views on developing new fair value auditing guidance where it is most critical in today’s environment. Entitled Auditing Complex Financial Instruments, the paper recognizes the strong demand from auditors and preparers for further guidance on auditing complex financial instruments, e.g., in situations of illiquid markets, which currently pose the greatest challenges for them.

“The current economic environment has given rise to particular issues relating to the reliability and auditability of fair value information,” emphasizes Arnold Schilder, IAASB Chairman. “This consultation addresses these issues and solicits discussions. The IAASB intends to use the feedback from the consultation in the revision of its Practice Statement 1012 on auditing derivative financial instruments.”

The Consultation Paper incorporates recent work by the UK Auditing Practices Board (APB) on the same topic, and asks specific questions about how that guidance might be adapted or supplemented for application in the international context. James Gunn, IAASB Technical Director, explains, “The APB has made significant progress in developing national guidance on this important topic and, just as importantly, leveraging it will enable us to put relevant guidance in the hands of auditors as quickly as possible.”

How to Comment

Comments on the Consultation Paper are requested by January 15, 2010. The Consultation Paper may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the "Submit a Comment" link on the Exposure Drafts and Consultation Papers page. First-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IAASB Technical Manager at +1 (212) 856-9420 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

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October 9, 2009

eNews from the International Public Sector Accounting Standards Board (IPSASB). We welcome your comments at This email address is being protected from spam bots, you need Javascript enabled to view it .

In This Issue:

1. IPSASB Confirms Approach on Financial Instruments Project
2. IPSASB/IMF Joint Task Force Project Progresses
3. New Zealand Discussion Documents Move IPSAS Convergence Forward
4. Discussion Started on New IPSASB Strategy
5. Raising Awareness of the IPSASB
6. Share IPSASB eNews with Your Colleagues

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1. IPSASB Confirms Approach on Financial Instruments Project

During its September 2009 meeting in Toronto, the IPSASB confirmed the approach on its financial instruments project after considering responses to three recently released Exposure Drafts (EDs).

The following were the three EDs under consideration:

ED 37, Financial Instruments: Presentation
ED 38, Financial Instruments: Recognition and Measurement
ED 39, Financial Instruments: Disclosures
These EDs were issued in April 2009 with a consultation period ending on July 31, 2009.

One of the objectives of the financial instruments project has been achieving convergence with the equivalent International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), with additional proposed amendments as considered necessary by the IPSASB.

The proposed International Public Sector Accounting Standards (IPSASs) incorporate IFRS requirements as of December 31, 2008, as follows:

ED 37 was based on IAS 32, Financial Instruments: Presentation
ED 38 was based on IAS 39, Financial Instruments: Recognition and Measurement
ED 39 was based on IFRS 7, Financial Instruments: Disclosures
The IPSASB developed additional guidance within the proposed standards on three key public sector specific areas-the distinction between contractual and non-contractual arrangements, concessionary loans, and financial guarantees issued with nil or nominal consideration.

Many respondents raised concerns about the impending changes the IASB is making to IAS 39 and the impact this may have on the IPSASB's project. The IPSASB discussed this concern in detail and concluded that the project should continue as planned and that any changes the IASB makes to IAS 39 will be considered in due course as deemed necessary.

More information on the financial instruments project can be found on the IPSASB Project History page at www.ifac.org/PublicSector/ProjectHistory.php?ProjID=0060.

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2. IPSASB/IMF Joint Task Force Project Progresses

Momentum is growing for the joint task force developed by the IPSASB and the International Monetary Fund (IMF) to discuss various interventions by governments in response to the global financial crisis, and the application of accounting standards for reporting such government actions.

The task force has three objectives:

To learn how governments are intending to deal with assets, obligations, and commitments acquired as a result of their actions in response to the financial crisis, and comment/contribute to their thinking
To learn about the application of accounting standards for the variety of government actions in response to the financial crisis, and identify the need for any improvements
To discuss reporting and valuation approaches for reporting these interventions
To date, the task force has held meetings with five important sets of stakeholders. The task force updated the IPSASB on its progress on September 11, 2009, and will provide the Board with a draft document summarizing its results on October 31, 2009.

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3. New Zealand Discussion Documents Move IPSAS Convergence Forward

The New Zealand Ministry of Economic Development (MED) and the New Zealand Accounting Standards Review Board (ASRB) have released two discussion documents that address a proposed new statutory framework for financial reporting for the country.

The MED paper, The Statutory Framework for Financial Reporting, proposes changes to the New Zealand standard-setting infrastructure and discusses which entities should have financial reporting obligations. The ARSB paper, Proposed Application of Accounting and Assurance Standards under the Proposed New Statutory Framework for Financial Reporting, discusses the changes in accounting standards and assurance requirements that this new framework would entail.

The primary principle underlying these changes is the idea that reporting requirements should fit the needs of different sectors of users (for example, for-profit versus non-profit), instead of being sector-neutral or one-size-fits-all. Consequently, the papers outline a sector-specific framework that would have different reporting tiers, each with a different level of requirements.

Included within these recommendations is the proposal that a set of New Zealand public benefit entity standards be developed for use in this sector. These standards would consist of "pure" IPSASs, IPSASs without amendment, for public sector entities.

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4. Discussion Started on New IPSASB Strategy

As the IPSASB reaches the end of its three-year planning cycle, it has launched a process to gather feedback from Board members to determine its activities and priorities for the next three-year period, 2010-2012.

A number of factors will impact the Board's work program over the next three years, including availability of staff and volunteer resources, access to funding of IPSASB standard-setting and operating activities, and potential changes to the IPSASB's oversight and governance arrangements.

The IPSASB staff is currently developing a draft strategy and operational plan that will reflect the Board's discussions. The draft will be circulated to IPSASB members prior to December 2009 for their comment with a view to discuss a revised draft at the December meeting.

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5. Raising Awareness of the IPSASB

A. Cash Basis Review Roundtable at CReCER 2009

At the September 2009 CReCER (Spanish acronym of Accounting and Accountability for Regional Economic Growth) Conference in São Paulo, Brazil, a Cash Basis Review Roundtable addressed three key issues:

Sharing experiences within Latin America on IPSAS adoption
Discussion of cash basis IPSASs, which also addressed the subject of public sector accounting for public/private partnerships and service concession arrangements
The need to increase Latin American representation on the IPSASB
To learn more about the Roundtable, please go to the CReCER 2009 website at www.creceramericas.org.

B. UNCTAD - IPSAS Conference On October 6, 2009, in Geneva

The United Nations Conference on Trade and Development hosted a conference titled "Practical Implementation of International Public Sector Accounting Standards" in Geneva, Switzerland on October 6, 2009.

The topics discussed included the following:

Overview of the IPSASB and IPSASs
Transitioning from cash basis to accrual accounting
Adoption and implementation obstacles and challenges
Country experiences in implementing IPSASs
C. ICPAK to Host Public Sector Accountability Conference November 4-6, 2009, in Nairobi

The Institute of Certified Public Accountants of Kenya (ICPAK) will host a conference titled "Accountability as a Driver for Socio Economic Development" on Nov. 4-6, 2009, in Nairobi, Kenya.

The conference is designed to help participants accomplish the following:

Fully appreciate the role of IPSASs in their various public sector jurisdictions
Understand, engage, and relate to the standards
Strengthen services delivery as IPSASs focus on service as opposed to IFRSs, which lean towards wealth maximization for shareholders
Strengthen mechanisms for promotion of high standards of financial management and reporting in the public sector

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6. Share IPSASB eNews with Your Colleagues

The IPSASB issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and advise them to subscribe to IPSASB eNews by following these simple steps:

1. Go to the eNews sign-up page at http://www.ifac.org/E-news/index.tmpl.
2. Enter your email address, name, and country.
3. Select "Public Sector eNews" from the checklist as well as any other eNews alerts that you would like to receive.

You will receive the next issue of the IPSASB eNews directly into your inbox.

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Forum of Firms Focuses on Enhancing Internal Quality Assurance Processes

(New York/October 08, 2009) – Over 40 senior audit professionals from 23 international networks of accounting firms met yesterday to share their experiences, industry insights, and current practices in establishing and strengthening global internal inspection processes, at a workshop organized by the Forum of Firms (Forum). The Forum assembled a group of experts to discuss new developments, including innovations in inspection organization, methodology and staffing, practical implementation issues, and processes for internal reporting.

“This workshop was designed to provide participants with a better understanding of current trends and practices as well as an opportunity for audit partners to exchange views and experiences in their continuing efforts to manage high-quality audit practices,” says Nick Fraser, Workshop Chairman and Chair, Transnational Auditors Committee.

Every member of the Forum must follow international professional standards on quality control at the firm level and for each transnational audit engagement: International Standard on Quality Control 1 (ISQC 1) and International Standard on Auditing 220 (ISA 220) as issued by the International Auditing and Assurance Standards Board. These standards require firms to establish a system of quality control to provide them with reasonable assurance that the firm and its personnel comply with professional standards and regulatory and legal requirements, and that reports issued by the firm or engagement partners are appropriate in the circumstances. Additionally, Forum members must conduct regular globally coordinated internal inspection reviews to monitor adherence to these standards across their networks.

“The requirement for Forum members to conduct these globally coordinated inspections is a unique and challenging obligation of Forum membership, which is just one example of the Forum’s ongoing commitment to facilitating continuous improvements in the quality of transnational audits worldwide,” concludes David Maxwell, Chair, Forum of Firms.

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IAASB releases new tools to support clarity ISA implementation

New York/October 5, 2009) – To promote awareness and understanding of the newly clarified1 International Standards on Auditing (ISAs), the International Auditing and Assurance Standards Board (IAASB) released today a series of “ISA Modules” focusing on some of the new and more significantly revised ISAs. Developed by IAASB staff, each of these modules combines short video presentations and accompanying slides that explain the key principles of, and major changes in, individual ISAs, including the implications for audits of small- and medium-sized entities (SMEs).

“Promoting the adoption and successful implementation of ISAs is one of the IAASB’s most important goals. These new tools will help us to move closer to that goal by providing support to those responsible for adopting and implementing the clarified ISAs, trainers, and auditors in applying them in practice,” explains Arnold Schilder, Chairman of the IAASB.

This new resource includes modules that provide an introduction to, and an overview of, the clarified ISAs, including ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing, and audit documentation and SME audit considerations. Additional modules cover ISAs that address related parties, auditing accounting estimates, including fair value estimates, communication with those charged with governance, and communicating deficiencies in internal control.

“Now is the time to address the necessary aspects of implementation. This includes developing or updating training programs and considering audit methodology changes,” emphasizes IAASB Technical Director James Gunn, adding, “Successful implementation of the clarified ISAs will depend on being well prepared when they come into effect.”

The ISA Modules are available to download free of charge from the IAASB Clarity Center on the IFAC website (web.ifac.org/clarity-center/support-and-guidance). The IAASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to their members and employees.

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THE BANKER/IFAC SURVEY SHOWS Small Business LendING HOlds steaDY; aCCOUNTANTS pLAY kEY ROLE IN lENDER dECISIONS

(New York/October 1, 2009) – Some small and medium-sized enterprises (SMEs) may have access to more credit down the road, but will have to pass more rigorous tests to demonstrate their creditworthiness, according to the findings of a global survey of banks conducted by The Banker magazine in association with the International Federation of Accountants (IFAC). The survey results, released today in a supplement on supporting small and medium-sized companies in the October issue of The Banker, also confirmed the critical role that accountants play in providing information that influences lender decision making.

“Accountants have a long-standing history as the trusted advisors for SMEs. To continue to fulfill this role, accountants should be proactive in advising their SME clients about lending options and requirements,” states IFAC Chief Executive Officer Ian Ball. “The survey results provide useful information to assist both accountants and SMEs.”

The survey showed that over 20 percent of the more than 350 bankers who answered questions about the future indicated that they would raise the number of new loans and increase loan amounts to existing SME clients over the next two years. Very few respondents, just 2 percent, said they would restrict loans to SMEs. However, bankers expect SMEs to provide more comprehensive information in their loan applications. Survey respondents indicated that they will increasingly look at cash-flow information, collateral, and customer history with the bank when considering loan applications. Financial statements, key risk indicators, and industry trends are also among the key information banks are focused on when making loan decisions.

Lenders also highly value audited financial statements. Two-thirds of the respondents indicated that their lending policies require some form of assurance on the entity’s financial statements from an external accountant, and audited financial statements are preferred by most respondents. In addition, another 60 percent of respondents said that accountant involvement in an SME’s business would significantly and positively influence their lending decisions.

“IFAC is dedicated to helping accounting firms meet the assurance and other needs of the small business community,” emphasizes IFAC President Robert Bunting. “We will also continue to take the pulse of the SME community through our outreach initiatives, particularly those of our Small and Medium Practices Committee.”

Brian Caplen, editor of The Banker, says: "It was very exciting to work with IFAC on this project. The health of the small and medium-sized business sector is critical to the global economy and it is very important for banks to understand their needs. We hope that the survey leads to a better understanding between banks and their clients."

About the Survey

The online survey was conducted by The Banker between August 21 and September 15, 2009. Over 500 bankers responded to the survey; there were 146 complete responses, and the remainder consisted of partial responses. The survey sample included banks in over 80 countries. The banks ranged in size from those with total assets of under US$100 million to over US$100,000 million. To view the survey results, go to www.ifac.org/financial-crisis/smp-sme-resources.php or see the October issue of The Banker.

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IFAC SUPPORTS G-20 INITIATIVES; CALLS FOR CORPORATE GOVERNANCE REFORMS AND EARLY ADOPTION OF GLOBAL STANDARDS

(New York/September 29, 2009) – The International Federation of Accountants (IFAC) supports the goals expressed by G-20 Leaders at the Pittsburgh Summit last week to advance “a framework for strong, sustainable, and balanced growth,” which includes reform of executive compensation packages, the adoption of a single set of high-quality global accounting standards, and increased resources for the World Bank and international development banks. IFAC recommends that these goals remain priorities and that G-20 Leaders act on them at a national level.

Two issues at the top of IFAC’s agenda, which were reflected in its submission to the G-20 finance ministers in July, are the need for governments to address corporate governance issues and to move ahead on implementing common global standards not only for accounting, but also for auditing and for auditor independence.

“IFAC shares the G-20’s view that systems of remuneration should provide incentives consistent with long-term growth and corporate performance,” emphasizes Robert Bunting, IFAC President, adding, “The time has come to act on that view.”

IFAC has recommended that the G-20 nations adopt and implement the Organization for Economic Cooperation and Development’s (OECD’s) Principles of Corporate Governance and that they ask the OECD to address the design of remuneration systems within its corporate governance framework. In addition, IFAC has strongly urged governments to support an increased role for corporate audit and compensation committees and for ensuring that members of these committees have the appropriate expertise.

As part of its governance recommendations, IFAC has called for “competency requirements for those preparing financial statements.” IFAC believes these competency requirements should apply not only to those working in listed companies, but also to those preparing governmental financial reports. This is especially critical as governments assume new forms of assets and liabilities as a result of their bailouts and stimulus plans. Greater transparency by governments, made possible through high-quality financial reporting, will help keep taxpayers informed and boost investor confidence.

“Governments can make major strides in enhancing their fiscal management and strengthening their financial reporting by adopting and implementing International Public Sector Accounting Standards (IPSASs),” emphasizes IFAC Chief Executive Officer Ian Ball. “Additionally, the adoption and consistent application of IPSASs will facilitate more reliable cross-national financial comparisons.”

In addition to supporting global adoption of IPSASs, IFAC has long advocated the adoption of International Financial Reporting Standards and International Standards on Auditing. Global standards will create a level playing field in the interpretation and exchange of financial information and contribute to economic and financial stability. Similarly, the adoption of global standards on auditor independence, such as those expressed in the Code of Ethics for Professional Accountants, will help to sustain trust in capital markets.

IFAC also recognizes the key role the World Bank plays in helping to achieve more balanced economic growth and applauds the G-20 nations for their commitment to it. IFAC continues to work closely with the World Bank to develop and strengthen the accountancy profession, particularly in emerging countries. A strong accountancy profession, supported by high-quality, robust standards, is a vital component of a country’s financial system.

To view IFAC’s recommendations to the G-20, go to www.ifac.org/financial-crisis. For the results of the G-20 Summit, visit The Pittsburgh Summit 2009.

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September 23, 2009

SMP eNews from the International Federation of Accountants (IFAC). We welcome your comments.

In This Issue:

Features

1. IFAC, Member Bodies, G20 Collaborate on Financial Crisis Issues
2. IFAC Explores SME Lending Issues
3. Global Accountancy Profession Responds to IFRS for SMEs
4. Developments in Alternative Assurance for SMEs

News from IFAC

5. IAASB Publishes Q&A for SMEs
6. Implementation Resources Available for Revised Ethics Code
7. New Translations of SMP Implementation Guides Now Available, New and Updated Guides Coming Soon

More News from Around the Globe

8. EC Consults on Adoption of ISAs, Stakeholders Express Support
9. Auditing Practices Board Issues Guidance on Smaller Entity Audit Documentation
10. AICPA Survey Highlights Economic Optimism, Top Issues Facing US CPA Firms
11. Movement Grows to Promote Accountants as Trusted Business Advisers
12. ICPAS Expands Resources for Training to Survive Economic Downturn
13. Share eNews with Your Colleagues
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Features:

1. IFAC, Member Bodies, G20 Collaborate on Financial Crisis Issues

Over 60 leaders of the global accountancy profession met in London in late July to attend IFAC's G20 Accountancy Summit, where they developed a set of eight recommendations that was submitted to the leaders of the Group of Twenty (G20) Finance Ministers and Central Bank Governors prior to the Group's September meeting on the financial crisis in Pittsburgh, Pennsylvania. The leaders attending the Summit represented accountancy organizations in 17 of the G20 countries.

These recommendations included:

accelerated efforts by G20 leaders to promote the adoption and implementation of a single set of high-quality standards for accounting, auditing, and auditor independence; and
explicitly addressing the needs and realities of small- and medium-sized enterprises (SMEs) in the formulation and implementation of policies and reforms.
The letter to the G20 working groups, with the full list of recommendations, is available in the section of the IFAC website devoted to the global financial crisis at www.ifac.org/financial-crisis.

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2. IFAC Explores SME Lending Issues

Access to lending is one of the greatest challenges affecting small- and medium-sized (SMEs) in the global economic downturn. To better understand this issue, IFAC has collaborated with the Financial Times magazine The Banker, in a survey exploring the relationship between SMEs and the lending community. The results of the survey will be published in the October 2009 edition of The Banker and will be shared with IFAC member bodies.

The survey will provide IFAC and stakeholders with a better understanding of the following:

The needs of lenders when serving SMEs
The perceived challenges for SMEs in acquiring financing
How the accountancy profession can best support SMEs and lenders
Resources to help SMEs gain access to finance can be accessed under the Resources section of the International Center for SMPs at www.ifac.org/smp.

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3. Global Accountancy Profession Responds to IFRS for SMEs

After a five-year consultation process, the International Accounting Standards Board (IASB) has published the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs), a self-contained standard designed to meet the needs and capabilities of SMEs. IFAC and many of its member bodies and others have responded to the publication.

IFAC issued a press release welcoming the IFRS for SMEs and encouraging its 157 member organizations to consider carefully how to use the standard in their respective jurisdictions. IFAC, largely through its SMP Committee, has closely followed and supported this project since its inception, providing input at various stages of the standard's development.

In addition, a number of stakeholders from around the world have already responded to the release:

ASEAN
The ASEAN Federation of Accountants (AFA) welcomed the release of the IFRS for SMEs.
European Union
a) The European Commission has decided to take more time for its ongoing review of the Fourth and Seventh Accounting Directives to carry out consultations on the standard. Commission staff will gather views of stakeholders on the reporting needs of SMEs and on other issues of relevance to the European Union's SME accounting framework.
b) The Fédération des Experts comptables Européens (FEE) has issued a release supporting it.
South Africa
South Africa is considered to be the first country to adopt the IFRS for SMEs. The South African Institute of Chartered Accountants has produced a summary of the standard.
United Kingdom
The UK's Accounting Standards Board has issued a consultation paper, Policy Proposal: The Future of UK GAAP, which sets out proposals for the future reporting requirements for UK and Irish entities, including the role of the IFRS for SMEs.
United States
The US may become a big market for the new standard after the American Institute of Certified Public Accountants' (AICPA) decision last year to recognize the IASB as an international accounting standard setter. In recognizing the IASB's role, AICPA members have the option to use the IFRS for SMEs. The AICPA has moved quickly to promote the voluntary use of the standard in the US with a press release welcoming the standard, a video discussing it, and publication of a Q-and-A resource on the IFRS for SMEs. More information and tools for the standard can be found at www.IFRS.com, the AICPA's website devoted to all IFRS issues.

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4. Developments in Alternative Assurance for SMEs

Exploring alternate assurance services for small- and medium-sized entities (SMEs) continues to be a priority for the International Auditing and Assurance Standards Board (IAASB) and other organizations. The IAASB's ongoing project within the Strategy and Work Program for 2009-2010 involves the revision of International Standard on Review Engagements (ISRE) 2400, Engagements to Review Financial Statements. The IAASB's current thinking is that such revisions, if undertaken with a sufficiently broad remit, should provide standards for services that provide acceptable alternatives to an audit. Exposure drafts are planned for 2010 and final standards for 2011.

Other related developments include the following:

FEE: The Fédération des Experts comptables Européens' (FEE) Survey on the Provision of Alternative Assurance and Related Services Across Europe offers insights into the existence, implementation, and consistency of alternative assurance and related services in Europe. It appears that the increases in audit exemption thresholds over the last few years in a number of European countries have exacerbated the need for alternative assurance services for SMEs.
AICPA: Earlier this year, the American Institute of Certified Public Accountants (AICPA) had released an exposure draft (ED) setting out proposed changes to its standards related to compilation and review engagements. It has received an unprecedented 160 comments, which are now under consideration. The ED proposed that an accountant be permitted to issue a review report on financial statements when also performing non-attest services that were designed to improve the reliability of the client's financial information. More information on the project is available from the AICPA's website, including Part I and Part II podcasts, an article in the Journal of Accountancy, and a short video.
ICAEW: The Institute of Chartered Accountants in England and Wales (ICAEW) issued the report Alternatives to Audit, which presents the findings of a two-year consultation by its Audit and Assurance Faculty on a new assurance service, the ICAEW Assurance Service, which is based on the IAASB idea of limited assurance. Other ICAEW resources related to Alternatives to the Audit can be found here.

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News from IFAC

5. IAASB Publishes Q&A for SMEs

The International Auditing and Assurance Standards Board (IAASB) has published a question-and-answer (Q&A) paper, titled Applying ISAs Proportionately with the Size and Complexity of an Entity, which helps explain how the clarified International Standards on Auditing (ISAs) can be applied to the audits of entities of different sizes, in particular small- and medium-sized entities (SMEs).

As a result of the IAASB Clarity Project, all 36 ISAs and the International Standard on Quality Control 1 were redrafted in a new clarified style that makes them easier to understand, translate, and implement. These standards were designed to be applied in a manner proportionate to the complexity and size of the entity being audited. The paper and additional resources being developed by the IAASB to support the adoption and implementation of the clarified ISAs, can be found in the IAASB Clarity Center at www.web.ifac.org/clarity-center/index or via the Resources section of the International Center for SMPs at www.ifac.org/smp.

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6. Implementation Resources Available for Revised Ethics Code

The Code becomes effective on January 1, 2011.

The full text of the revised Code can be accessed from the Ethics section of the IFAC online bookstore at www.ifac.org/Store.

Recognizing the effect these changes will have on professional accountants in practice and business, the IESBA staff has developed a range of materials to facilitate adoption and implementation of the Code. The documents, which are non-authoritative and issued for information, include the following:

Slide Presentations: High-level and in-depth that can be used to explain the content of the Code
Overview of Independence Requirements: A short document providing an overview of the independence requirements contained in Section 290 of the Code
Comparisons: A high-level and more detailed comparison that will help people understand the differences between the July 2009 Code and the previous Code
Template: A comparison template containing the complete text of the Code, which can assist individuals who want to understand how the provisions in their jurisdiction match up to the Code
All of these support materials can be accessed from the Resources section of the IESBA website at www.ifac.org/Ethics/Resources.php.

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7. New Translations of SMP Implementation Guides Now Available, New and Updated Guides Coming Soon

New translations of the Guide to Using International Standards on Auditing in the Audits of Small- and Medium-sized Entities (ISA Guide), and the Guide to Quality Control for Small- and Medium-sized Practices (QC Guide), are now available in the IFAC online Translations Database at www.ifac.org/Translations/database.php or via the Resources section of the International Center for SMPs at www.ifac.org/smp.

The ISA Guide has now been translated into the following languages:

French, by Néjib Sfayhi of Audit & Systems - Tunisia, with a summary prepared by Hechmi Abdelwahed, member of the IFAC Small and Medium Practices Committee
Spanish, by Samuel Mantilla with ECOE Ediciones
The QC Guide has been translated into the following languages:

French, by CGA-Canada
Spanish, by Instituto Mexicano de Contadores Públicos
Portuguese, by the Federal Accounting Council (CFC) and the Brazilian Independent Auditors Institute (IBRACON)
In the next 12 months, IFAC will be issuing a revised and improved ISA Guide, designed to support the newly clarified ISAs, a revised and improved QC Guide, and a new Guide to Practice Management for Use by Small- and Medium-sized Practices. All SMP publications can be downloaded for free via the Resources section of the International Center for SMPs at www.ifac.org/smp.

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More News from Around the Globe

8. EC Consults on Adoption of ISAs, Stakeholders Express Support

The European Commission (EC) has completed a public consultation to determine whether the International Auditing and Assurance Standards Board's International Standards on Auditing (ISAs) should be adopted in the European Union (EU) for the statutory audits of private entities. The survey sought comment from users of audit reports, companies, public authorities and regulators, academics, and members of the public on the use of ISAs within Europe.

Several stakeholders have already embraced the move. In a statement, the Fédération des Experts comptables Européens (FEE) has stated that it "fully supports the adoption of ISAs for all statutory audits in the EU as the use of harmonized international auditing standards will increase audit quality and enhance confidence in the reliability, comparability and consistency of financial statements in the EU, as well as the acceptance of audit reports beyond their home jurisdictions whether within or outside the EU."

The European Federation of Accountants and Auditors for SMEs has echoed the FEE's comments in its own public statement.

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9. Auditing Practices Board Issues Guidance on Smaller Entity Audit Documentation

The Auditing Practices Board of the Financial Reporting Council has issued an exposure draft of Practice Note 26 (Revised), "Guidance on Smaller Entity Audit Documentation," which outlines proposed changes to the practice note, including guidance to auditors on the application of documentation requirements contained within the clarified International Standards on Auditing (ISAs) (UK and Ireland) to the audits of smaller entities.

In particular, the revision focuses on areas where feedback regarding the implementation of the ISAs (UK and Ireland) has identified that further guidance could be helpful, for example, uncertainty about the extent of documentation required to evidence the auditor's understanding of the entity, especially with regard to internal control.

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10. AICPA Survey Highlights Economic Optimism, Top Issues Facing US CPA Firms

Accounting firms appear to be weathering the economic downturn well, according to the latest 2009 CPA Firm Top Issues Survey released by the AICPA. When asked about the economy's greatest effect on them, many firms with 20 or fewer professionals picked "no impact." When projecting expected revenue in the year ending May 2010, roughly 45-60 percent of every firm segment expected some growth. Firms also generally expected little change in staffing this year, although the percentage varied widely by firm size.

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11. Movement Grows to Promote Accountants as Trusted Business Advisers

Movement is growing within the profession to promote accountants as trusted business advisers to their clients. The feature article in the Canadian Institute of Chartered Accountants publication, CA Magazine, makes the case for this evolution of the accountant's role to their small- and medium-sized entity clients by outlining ten new ways to add value, such as providing diagnoses of and proposing solutions to client fiscal problems and by providing input to strategic planning and refining business models.

However, to capitalize from the role of trusted business advisers may demand practices taking a different approach to pricing. The June 2009 edition of the AICPA's Journal of Accountancy ran an article, "Pricing on Purpose: How to Implement Value Pricing in Your Firm," arguing that pricing by the hour doesn't adequately measure the value firms create for their clients. Instead, the article encourages CPAs to consider using "value pricing" which calculates value as perceived and determined by the client.

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12. ICPAS Expands Resources for Training to Survive Economic Downturn

The Institute of Certified Public Accountants of Singapore (ICPAS) has contributed just over $1 million to its Continuous Professional Education Training Assistance Package in hopes of encouraging members to continue ongoing training and development during the economic crisis. The package is meant to assist individuals, as well as small and medium practices, manage their training costs and encourage firms to continue enrolling their CPAs in training programs. The package offers ICPAS members training credits worth 50 percent of their membership fees.

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For more information about any of the items mentioned above or other information about the SMP Committee, please contact This email address is being protected from spam bots, you need Javascript enabled to view it .

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IFAC’S BUNTING CALLS FOR GLOBAL COMMITMENT TO HIGH-QUALITY FINANCIAL STANDARDS TO SOLVE CRISIS

(São Paulo, Brazil/September 23, 2009) – “The accounting profession can—and should—take a leadership role in helping the world steer its way out of the global financial crisis,” International Federation of Accountants (IFAC) President Robert L. Bunting told the audience gathered in São Paulo, Brazil, for the third annual CReCER conference (Spanish acronym of Accounting and Accountability for Regional Economic Growth). “At this crossroad for the world economy, this means raising our voice about what we know best—including the capital markets, government accountability, and the small and midsize businesses we call SMEs.”

Mr. Bunting reminded the audience that every kind of entity needs the financial information that high-quality standards provide as we move toward recovery from the recession. Businesses in Latin America and the Caribbean often need to prove their economic viability as business partners for new opportunities in the Middle East and China, or for ongoing ones in this hemisphere. Governments need to confirm their fiscal health for the capital markets or for membership in regional economic organizations.

“Governments worldwide must follow the same high standards of financial reporting as their private sector counterparts if we are to believe the economic picture they paint—and to avoid this kind of global meltdown in the future,” Mr. Bunting said. “The broad-based adoption of International Public Sector Accounting Standards—which IFAC has also recommended strongly to the G-20 Leaders—is critical to improving government transparency and accountability, in light of the unprecedented takeovers, lending, guarantees, and bailouts of major market institutions, banks, and companies that have taken place," Mr. Bunting added. He also noted that IFAC is working with the World Bank to develop and strengthen the accountancy profession in developing and emerging economies as a key step in achieving financial stability.

Mr. Bunting also spoke out about the importance of supporting small and midsize businesses and the smaller accountancy firms that serve them in recovery from the recession. “The people behind Latin America’s SMEs are vital to creating sustainable growth, jobs, and wealth,” he said, because “they turn innovation and agility into new products and services. The OECD says they account for most businesses in all countries and are a major source of new jobs. Yet, they are often a forgotten voice in the regulatory and public policy dialogue. We cannot let this happen.”

The CReCER conference, September 23–25, 2009, is designed to increase awareness of the critical importance of sound financial reporting and auditing for the development of a well-functioning market economy and of an efficient public sector—the cornerstones of equitable and sustainable economic development. Over 800 individuals attended, including representatives of the accountancy profession, governments, and the donor community. IFAC, the World Bank, and the Inter-American Development Bank organized the first CReCER event in June 2007, and are joined by IFAC member Conselho Federal de Contabilidade and the six largest accounting networks in the preparation of this year’s event, along with other sponsors.

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IFAC and International Valuation Standards Council to Collaborate on Improving Global Valuation Consistency

(New York/September 8, 2009) – The International Federation of Accountants (IFAC) and the International Valuation Standards Council (IVSC) have signed a Memorandum of Understanding designed to enhance their respective impact on issues surrounding valuations—particularly those related to improving the consistency of global valuation standards affecting the preparation and audits of financial reports.

Michel Prada, Chairman of the Board of Trustees for the IVSC, states, “Valuation standards, coupled with clear accounting and auditing principles, are key to the efficiency of the global market economy. This Memorandum of Understanding demonstrates the cohesive and united approach of the IVSC, IFAC, and International Auditing and Assurance Standards Board (IAASB) to maintaining standards as global markets continue to develop.”

“The current economic crisis has highlighted the challenges associated with the valuation of assets and liabilities by both preparers and auditors,” says Bob Bunting, President of IFAC. “I am delighted that our two organizations will seek ways in which we can work together in serving the public interest. As a first step, I am encouraged that the IVSC will appoint a representative to serve on the consultative advisory group of the IAASB, which works to strengthen public confidence in the auditing profession by establishing high-quality, global auditing, assurance, quality control, and related services. I look forward to developing other areas of collaboration with the IVSC in the coming months.”

About IFAC

About the IVSC

The IVSC (www.ivsc.org) is charged with developing robust and transparent procedures for performing international valuations through a single set of globally recognized valuation standards, acceptable to the world’s capital markets organizations market participants and regulators, which will meet the challenges of a fast-changing global economy. The governance structure of the IVSC, a non-profit organization incorporated in the U.S., includes two independent technical Boards—the International Valuation Standards Board and the International Valuation Professional Board—and a global Board of Trustees responsible for the overall strategic direction and funding of the IVSC. The IVSC works co-operatively with national professional valuation institutes, users and preparers of valuations, governments, regulators, and academic bodies, all of whom can become members of the IVSC and have an important role to play in advising the boards on agenda decisions and priorities in the work of the IVSC.

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August 31, 2009

We welcome your comments.

In this issue:

1) Call for Comments on Exposure Draft for the IAESB 2010-2012 Strategy and Work Plan
2) Consultation Expands Range of IES Framework Project
3) Progress Continues on IAESB Drafting Conventions Initiative
4) IAESB Chair Engages Academe
5) The 2009 Handbook of International Education Pronouncements Is Now Available
6) Progress Report on IAAER/ACCA Education Research

1. Call for Comments on Exposure Draft for the IAESB 2010-2012 Strategy and Work Plan

The International Accounting Education Standards Board (IAESB) is seeking comments from IFAC member bodies, regulators, accounting firms, employers, the academic community, and others on the exposure draft (ED) of its 2010-2012 Strategy and Work Plan.

The proposed strategy focuses on revising International Education Standards (IESs) and developing new guidance for the adoption and implementation of the standards. Through the projects and activities outlined in the proposed plan, the IAESB aims to continue to assist IFAC member bodies in developing the capacity and capability of the global accountancy profession.

Three high-priority activities described in the ED are:

Conduct a revision of the IESs based on the results of the drafting conventions project and recent developments in the accountancy profession;
Develop implementation guidance in areas of measurable implementation of the IESs, competency frameworks, and quality control measures for educators; and
Promote a greater awareness of the IAESB's role in advancing international debate on issues related to the development and assessment of professional accountants.

Organizations and individuals with an interest in accounting education are invited to comment on the IAESB's strategy and work plan by October 5, 2009. The exposure draft may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. To provide a comment, please use the "Submit a Comment" link.

2. Consultation Expands Range of IES Framework Project

The IAESB is currently developing a revised draft of the Framework for International Education Standards (Framework) as a result of its public consultation on proposed revisions to the document. The consultation is an important step of an ongoing project to revise the Framework and was conducted by the IAESB during the first two quarters of 2009.

Based on the review to date, the IAESB plans to expand the Framework by describing the various forms of learning and development that can be used in professional accounting education programs. The revision process will also improve the clarity of the Framework, update sections to reflect the IAESB's experience, and expand on the purpose of the IAESB's standards and guidance.

The IAESB will confer with its Consultative Advisory Group in the third quarter of 2009. Subject to these discussions, the IAESB expects to approve the Framework for publication in the fourth quarter of 2009.

For further information on this initiative, please visit the IAESB's project page on the IFAC website: www.ifac.org/Education/ProjectHistory.php?ProjID=0073.

3. Progress Continues on IAESB Drafting Conventions Initiative

The IAESB has considered significant comments received on its exposure draft of the Explanatory Memorandum for the IAESB Drafting Conventions. The goal of the project is to develop principles and practices for the drafting of IAESB pronouncements in order to improve their clarity and consistency.

Topics discussed include:

Discontinuing the use of a presumptive requirement;
Developing a new structure for the standards; and
Reviewing IAESB definitions to ensure consistency with the definitions used by other IFAC boards and committees.

The IAESB will consider a draft of a proposed statement on the drafting conventions at its October 2009 meeting.

4. IAESB Chair Engages Academe

Mark Allison, IAESB Chair, participated in a panel discussion on the impact of globalization on accounting education at the 2009 annual meeting of the American Accounting Association.

Mr. Allison provided a brief overview of the IAESB's pronouncements and upcoming activities, including the current public consultation of the IAESB 2010-2012 Strategy and Work Plan. One of the key platforms of the new work plan is to reach out to the academic community to ensure more active participation in the development of the IAESB pronouncements and standard-setting activities.

The IAESB Chair indicated the need for more applied research aimed at supporting the development of accounting education policy and encouraged the academic community to participate in commenting on the IAESB's pronouncements to ensure consistent implementation and greater awareness.

5. The 2009 Handbook of International Education Pronouncements Is Now Available

The IAESB 2009 Handbook of International Education Pronouncements is now available for downloading, free of charge, from the IFAC online bookstore (www.ifac.org/store). Print copies can also be ordered for shipment.

The new IAESB Handbook contains the IAESB's suite of eight International Education Standards, as well as the Framework for International Education Pronouncements, Introduction to International Education Standards, and three International Education Practice Statements.

6. Progress Report on IAAER/ACCA Education Research

In the second quarter of 2008, the International Association for Accounting Education & Research (IAAER) held a research competition, funded by the Association of Certified Chartered Accountants (ACCA), to commission four research projects that will help the IAESB by providing evidence on the acceptance, implementation, and impact of accounting education standards throughout the world.

As a follow-up to its February 2009 meeting, the IAAER held a meeting in early August to provide feedback on the four winning research proposals that cover topics related to the IAESB work program. IAESB members who attended the meeting indicated that they were pleased with the progress of the projects, given that all of the projects had reached the point where data was being collected and analyzed.

The projects are as follows:

"How Does the Methodology of Education and Training in Ethics Affect the Ethical Awareness and Practice of the Professional Accountant?"
"Access to CPD Opportunities and Resources to Assist Professional Accountants to Meet Their Commitment to Life Long Learning: Evidence from the Asia Pacific Region"
"Searching for Best Practice in the Development and Assessment of Non-Technical Skills in Accountancy Trainees - A Global Study"
"The Awareness and Impact of International Accounting Education Standards"

The research teams will continue their work over the coming year with the aim of presenting their results at the 11th IAAER World Congress of Accounting Educators and Researchers in November 2010. More information about the teams conducting these research projects is available here.

For more information about any of the items mentioned above or other information about the IAESB and IFAC, please contact This email address is being protected from spam bots, you need Javascript enabled to view it .

August 26, 2009

Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA), a standard-setting board within the International Federation of Accountants (IFAC). We welcome your comments.

This edition of the IESBA eNews will focus predominantly on the revised IFAC Code of Ethics for Professional Accountants (the Code).

In This Issue:

1. IESBA Issues Revised Code of Ethics
2. Revisions Strengthen Independence, Clarify Requirements
3. Member Bodies and Firms Encouraged to Develop Implementation Plans
4. Resources Available to Support Adoption and Implementation of Revised Code
5. Ethics Board Launches Process for Developing 2010-2012 Strategic Plan
6. Tell Others About Ethics eNews

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1. IESBA Issues Revised Code of Ethics

The International Ethics Standards Board for Accountants (IESBA) issued in July, following the approval and consideration of due process by the Public Interest Oversight Board, a revised Code of Ethics for Professional Accountants (the Code). The revised Code clarifies requirements for all professional accountants and significantly strengthens the independence requirements of auditors.

The Code is effective on January 1, 2011.

The full text of the revised Code can be accessed from the Ethics section of the IFAC online bookstore at www.ifac.org/Store.

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2. Revisions Strengthen Independence, Clarify Requirements

The revisions to Code of Ethics for Professional Accountants (the Code) include the following changes, among others, to strengthen the Code's independence requirements:

Extending the independence requirements for audits of listed entities to all public interest entities;
Requiring a cooling-off period before certain members of the firm can join public interest audit clients in certain specified positions;
Extending partner rotation requirements to all key audit partners;
Strengthening some of the provisions related to the provision of non-assurance services to audit clients;
Requiring a pre- or post-issuance review if total fees from a public interest audit client exceed 15% of the total fees of the firm for two consecutive years; and
Prohibiting key audit partners from being evaluated on or compensated for selling non-assurance services to their audit clients.
Also included within the revisions are changes in the drafting conventions used in the Code. These changes, which include the use of the word "shall," present the Code's requirements in clearer, more precise language.

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3. Member Bodies and Firms Encouraged to Develop Implementation Plans

Given the effect the revisions to Code of Ethics for Professional Accountants (the Code) will likely have on professional practice, and the fact that they will go into effect less than 18 months from now, member bodies, firms, and other relevant stakeholders are encouraged to develop plans for implementing the revised Code by the effective date of January 1, 2011.

Issues to consider while developing implementation plans would include the implications of:

Expanded partner rotation requirements;
New independence requirements for public interest entity audit clients; and
Expanded requirements related to the provision of non-assurance services to audit clients.

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4. Resources Available to Support Adoption and Implementation of Revised Code

The IESBA has developed a number of resources to support adoption and implementation efforts for the revised Code of Ethics for Professional Accountants (the Code).

These materials include the following:

A high-level overview of the Code
A detailed presentation slide package and speaking notes addressing the independence requirements contained in section 290
A presentation slide package and speaking notes addressing the independence requirements for audits of public interest entities
Templates, both high-level and detailed, to help member bodies/firms analyze differences between the requirements in their jurisdiction and the requirements of the revised Code
Comparisons, both high-level and detailed, to the existing Code
A short paper describing the changes from the existing Code
An article for member bodies describing the process of developing the Code, highlighting some key changes and emphasizing the need to start the process of implementation
All of these support materials will be available soon in the Ethics section of the IFAC website (www.ifac.org/Ethics).

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5. Ethics Board Launches Process for Developing 2010-2012 Strategic Plan

In April 2009, the IESBA launched a strategic review to develop the 2010-2012 Strategic and Operational Plan.

The IESBA's terms of reference and due process require the strategic review to include a formal survey of key stakeholders' views about issues that they believe should be addressed in the immediate future. The IESBA conducted a short survey to solicit these views in July. The IESBA will consider this feedback as it develops its Strategic Plan which will be exposed for public comment.

To view the 2007-2009 Strategic and Operational Plan, please visit the Ethics section of the IFAC online bookstore at www.ifac.org/Store.

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1. Go to the eNews sign-up page at http://www.ifac.org/E-news/index.tmpl.
2. Enter your email address, name, and country.
3. Select "Ethics eNews" from the checklist, as well as any other eNews alerts that you would like to receive.

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For more information about any of the items mentioned above or other information about the IESBA, please contact: This email address is being protected from spam bots, you need Javascript enabled to view it .

About the IESBA and IFAC

The IESBA develops ethical standards and guidance for use by professional accountants. It encourages member bodies of IFAC to adopt high standards of ethics for their members and promotes good ethical practices globally. The Public Interest Oversight Board oversees the activities of the IESBA 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, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

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IAASB Staff issues q&As TO guide Auditors’ Effective Implementation of Clarified ISAs; ADDRESSES SME ISSUES

(New York/August 3, 2009) – To assist auditors worldwide in implementing the clarified International Standards on Auditing (ISAs), the staff of the International Auditing and Assurance Standards Board (IAASB) has developed a new question-and-answer publication entitled Applying ISAs Proportionately with the Size and Complexity of an Entity. The publication is relevant in the context of any audit, but will be of particular help to those who audit, or oversee the audits of, small- and medium-sized entities (SMEs).

“SMEs are an important sector of national economies and one that is sensitive to significant changes in standards,” emphasizes James Gunn, IAASB Technical Director. “This staff publication highlights provisions within the ISAs that guide auditors in applying the requirements to audits of SMEs in an efficient and effective manner.”

“Many of those with responsibility for financial statement audits are progressing their consideration of implementation issues of the clarified ISAs. We applaud this and believe that the IAASB staff has a role to play in supporting the implementation effort,” adds Mr. Gunn.

The publication is available for download free of charge from the IFAC website (http://web.ifac.org/clarity-center/support-and-guidance).

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In This Issue:

Features:

New Guidance Issued for Evaluating and Improving Costing
Articles of Merit Submission Deadline Extended to September 3, 2009
Projects Launched on Governance, Risk, and Internal Control Guidance
IFAC G20 Accountancy Summit Results in Mandate for Global Standards
Pragmatic Approach to Guide Through the Debate on the Efficient Markets Hypothesis
IFAC Supports IASB Guidance on Business Reporting, Management Commentary
Sustainability Framework Provides New Climate Change Resources
Other Sustainability News from Around the World:

ACCA Urges UK to Do More on Renewable Energy
Australian Board Advances Water Accounting Standards
CICA Report Raises Board Awareness of Climate Change
CIMA Conducting Climate Change Survey
Principles of the Prince of Wales Sustainability Project Endorsed by 16 Accounting Bodies
SAICA Publishes Green, Expands Sustainability Initiatives
UK Carbon Reporting Model Developed by PricewaterhouseCoopers
Features:

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1. New Guidance Issued for Evaluating and Improving Costing

To help professional accountants support better management decision-making, the PAIB Committee has published a new International Good Practice Guidance (IGPG), titled, Evaluating and Improving Costing in Organizations, which establishes six fundamental principles for evaluating and improving their approach to costing.

This guidance is targeted to professionals working in commerce, industry, as well as the public sector. It recognizes the importance of distinguishing between the purposes and information needs of cost accounting to meet the demands of external reporting, cost measurement, and reporting for internal decision support.

A companion document for the guidance, titled Evaluating the Costing Journey: A Costing Levels Maturity Model, has also been published to help professional accountants decide what level of costing sophistication to use given organizational requirements and the needs of managers and employees. The model can help professional accountants exercise professional judgment to assess their organization's existing costing capabilities. IFAC welcomes comments on this model, which is a beta version.

Both documents can be downloaded free of charge from the PAIB section of the IFAC online bookstore at www.ifac.org/store.

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2. Articles of Merit Submission Deadline Extended to September 3, 2009

Member bodies are encouraged to nominate articles that have previously been published in their journals or other publications and on their websites. Each member body may nominate up to three articles. The articles may cover any relevant aspect or current issue related to the roles and domain of professional accountants worldwide, whether employed in commerce, industry, the public sector, education, or the not-for-profit sector.. The PAIB Committee's judging panel will nominate 20-25 articles from the submissions to be published on the IFAC website. Professional accountants, as well as other readers, will be invited to vote on these articles to supplement the voting of the PAIB judging panel.

For more information, contact Gabriella Teofilo, Operations Assistant, Professional Accountants in Business Committee, at This email address is being protected from spam bots, you need Javascript enabled to view it .

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3. Projects Launched on Governance, Risk, and Internal Control Guidance

The Professional Accountants in Business Committee has launched two projects aimed at improving guidance related to governance, risk, and internal control.

After the recent publication of the International Good Practice Guidance (IGPG) on Evaluating and Improving Governance in Organizations and IFAC's submissions to the G20 (see item 4), the PAIB Committee intends to publish a reconciliation of its IGPG principles with the OECD Principles of Corporate Governance. IFAC's IGPG on governance complements the OECD Principles as its main purpose is to support PAIBs and to help their organizations evaluate and further improve their governance structures and systems. This will help restore the balance between compliance and performance in organizations.

The PAIB Committee is also developing an IGPG on Evaluating and Improving Internal Control in Organizations. The goal will be to provide practical guidance that will focus on common pitfalls in the way current internal control systems are being deployed, and what should be done to avoid them. Widespread poor corporate performance and outright failures, particularly resulting from the financial crisis, suggest that many organizations are not protected well enough by their governance, risk management, and internal control systems. This is despite the use of widely accepted guidance, such as the framework of the Committee of Sponsoring Organizations of the Treadway Commission. An IGPG on this subject will serve as an opportunity to illustrate how PAIBs can support their organizations in evaluating and improving their internal controls.

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4. IFAC G20 Accountancy Summit Results in Mandate for Global Standards

Over 60 leaders of the accountancy profession attended IFAC's G20 Accountancy Summit on July 23-24 in London to achieve consensus on a series of recommendations that will be made to the leaders of the Group of Twenty (G20) Finance Ministers and Central Bank Governors prior to the Group's September meeting on the financial crisis.

Participants unanimously agreed that the public interest would be best served by a single set of high-quality, principles-based financial reporting and auditing standards for listed and public interest entities.

Attendees also agreed on the following recommendations:

It is important to have balanced views in the standard-setting process, ensuring that there is no undue influence from any one stakeholder group.
The International Accounting Standards Board needs to have a robust governance structure that will ensure its effectiveness and independence.
Governments should follow the same high standards of financial reporting as their private sector counterparts and adopt International Public Sector Accounting Standards.
The needs of small and medium enterprises need to be considered in the development of standards and re-regulation.
The G20 should continue to make strengthening corporate governance a priority.
A more robust financial reporting model is required that includes, among other things, reporting on sustainability and environmental issues.
These and other recommendations from the summit participants, who represented accountancy organizations in 17 of the G20 countries, are included in a communiqué that was sent to the G20.

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5. Pragmatic Approach to Guide Through the Debate on the Efficient Markets Hypothesis

To complement recent guidance on Project Appraisal Using Discounted Cash Flow, the PAIB Committee has started development on principles for an International Good Practice Guidance (IGPG) on Estimating and Using the Cost of Capital for Project [Investment] Appraisal. This is timely given the widespread debate on the validity of Efficient Markets Hypothesis (EMH) and the importance of the cost of capital to good financial management. Due to the time value of money, the cost of capital plays a fundamental role in deriving a point valuation of a set of cash flows taking place over time. Its calculation has been historically based on the assumption of efficient markets that underpins financial calculations of valuing everything from stocks to pension fund liabilities to executive compensation.

While there does not appear to be an immediate solution arising out of the disagreements between EMH supporters and behavioralists, professional accountants in business can take a pragmatic approach to estimating and using the cost of capital. A key principle in the IGPG will likely recognize that the estimation of the cost of equity is not a precise science. It will explain that there are different methodologies by which to estimate the cost of equity-often involving several variables which themselves have to be estimated. More than one methodology can be used along with sensitivity analysis to produce a range in which the "true" cost of capital might reasonably fall.

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6. IFAC Supports IASB Guidance on Business Reporting, Management Commentary

The International Accounting Standards Board (IASB) has issued for public comment the Exposure Draft (ED) titled Management Commentary. Based on the 2005 discussion paper of the same name, the draft outlines a proposed framework to help entities prepare the narrative reports often referred to as management commentary. Comments for the ED are requested by March 1, 2010.

IFAC supports this IASB project and views management commentary as a key element of business performance reporting, which could benefit greatly from principles-based international standards or guidance. Recent IFAC studies on developments in the financial reporting supply chain (see http://ifac.org/frsc) have also demonstrated the importance of management commentary for investors and other stakeholders.

In addition, in 2010, the PAIB Committee will consider additional guidance for professional accountants who work as chief financial officers, controllers, or preparers on evaluating and improving business reporting.

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7. Sustainability Framework Provides New Climate Change Resources

The IFAC Sustainability Framework, a web-based tool that targets professional accountants who can influence the way organizations integrate sustainability into their objectives, strategies, management, and definitions of success, now has a resources section related to climate change policy developments. Carbon disclosures, cap-and-trade, and green legislative initiatives are among the issues addressed by these new links.

The recently launched framework focuses on sustainability from four business perspectives: strategy, internal management, financial investors, and that of other stakeholders. It provides guidance on key considerations for accountants and resources to promote sustainability leadership throughout the full management cycle-from making and executing strategic decisions to providing useful performance reporting to stakeholders. As of July 29, more than 12,000 visitors have accessed the framework.

The framework can be found at web.ifac.org/sustainability-framework/splash and the resources related to climate change policy are at http://web.ifac.org/sustainability-framework/resources.

Further sustainability news from the around the globe can be found in item 8 of this eNews below.

Other Sustainability News from Around the World:

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8. ACCA Urges UK to Do More on Renewable Energy

The United Kingdom must do more in the renewable energy market if it is to achieve climate change targets, the Association of Chartered Certified Accountants (ACCA) declared in a new report titled, The Future of Renewable Energy. The UK, along with other countries of the European Union, has committed to the "202020" agreement, which involves reducing overall emissions to at least 20 percent below 1990 levels and increasing the share of renewables in energy use to 20%, both by 2020. To meet these goals, ACCA says in the paper, the UK needs to take advantage of the investment potential in renewable energy technology and recognize that the key elements of a global policy framework for a "green new deal" must include effectiveness, efficiency, and equity.

More information about the paper and ACCA's other sustainability and environmental initiatives can be found at www.accaglobal.com/sustainability.

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9. Australian Board Advances Water Accounting Standards

The Water Accounting Standards Board, responsible for the oversight and coordination of all Australian Water Accounting Standards (AWAS), has prepared a Water Accounting Conceptual Framework, which aims to assist in the preparation and presentation of General Purpose Water Accounting Reports by providing guidelines for the development of AWAS. The WASB has also delivered a Preliminary Australian Water Accounting Standard that proposes to standardize the practice of water accounting in Australia. These proposals do not impact financial reporting requirements. They predominantly deal with standardizing reporting in relation to quantities of water assets and liabilities, which is one of the objects under the National Water Initiative.

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10. CICA Report Raises Board Awareness of Climate Change

A new publication from the Canadian Institute of Chartered Accountants provides a series of questions corporate directors can ask relating to the business implications of climate change. The Risk Management and Governance Board of the Canadian Institute of Chartered Accountants commissioned the publication titled Climate Change Briefing - Questions for Directors to Ask to increase awareness among corporate board members about the business impacts and governance issues associated with climate change. The publication is available online in the climate change section of the CICA's website (www.cica.ca/climate).

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11. CIMA Conducting Climate Change Survey

The Chartered Institute of Management Accountants (CIMA) is conducting a survey, in conjunction with The Prince of Wale's Accounting for Sustainability Project, in order to get a better understanding about the current and potential involvement of finance professionals in climate change initiatives. According to a recent poll on CIMA's new online community board, CIMAsphere, 88 percent of respondents think that climate change is relevant to the finance team. The survey results will be published by CIMA and The Prince's Accounting for Sustainability Project later this year and will be provided to all respondents on request. The survey can be accessed by going to www.cimaglobal.com/sustainabilitysurvey.

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12. Principles of the Prince of Wales Sustainability Project Endorsed by 16 Accounting Bodies

In July, 16 accounting bodies endorsed to a set of sustainability principles developed by The Prince of Wales Accounting for Sustainability Project, in which IFAC is also taking a leadership role. The 16 accounting bodies include 14 IFAC member bodies and comprise the Project's Forum.

The Project's Sustainability Principles are:

Influence and inform
Lead by example
Drive thought leadership
Collaborate through the Forum
Incorporate accounting for sustainability within training and professional education
More information about the principles and a full list of all the signatories can be found at www.accountingforsustainability.org/output/Page182.asp.

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13. SAICA Publishes Green, Expands Sustainability Initiatives

The South African Institute of Chartered Accountants (SAICA) will soon publish the book Green, by Graham Terry of SAICA, which outlines why corporate leaders need to embrace sustainability to ensure future profitability. The book will be launched to members and the public at large at local bookstores throughout South Africa in August. In addition, SAICA has been hosting a series of Sustainability breakfasts, published a corporate guideline titled The Reporting and Assurance of Greenhouse Gas Emissions in South Africa and has offered a training masterclass certified by the Global Reporting Initiative. In addition, SAICA has published a number of sustainability articles in Accountancy SA magazine and established a carbon tax sub-committee. More information on SAICA's sustainability initiatives can be found at www.sustainabilitysa.org/ and at

www.saica.co.za/TechnicalInformation/Sustainability/IntroductionandBackground/tabid/1591/language/en-US/Default.aspx.

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14. UK Carbon Reporting Model Developed by PricewaterhouseCoopers

PricewaterhouseCoopers has developed a groundbreaking carbon emissions reporting model for business climate change and greenhouse emissions reporting. It was designed to help business respond to the UK government's launch of the world's first legally binding carbon budget, aimed at achieving 80 percent reduction of carbon emissions by 2050. More information about the model can be accessed at www.ukmediacentre.pwc.com/Content/Detail.asp?ReleaseID=3239&NewsAreaID=2.

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IFAC CALLS FOR G20 TO ADOPT GLOBAL ACCOUNTING, AUDITING, AND INDEPENDENCE STANDARDS AND TO ENHANCE GOVERNMENT TRANSPARENCY (New York/July 31, 2009) – In a letter issued today, the International Federation of Accountants (IFAC) has called for broad action by the G20 leaders at their September meeting in Pittsburgh, PA to encourage adoption and implementation of global accounting, auditing, and auditor independence standards to improve the ability of capital markets to work globally. In addition, IFAC has called for the worldwide adoption and implementation of International Public Sector Accounting Standards as a means to greatly improve government transparency and accountability in light of the “unprecedented takeovers, lending, guarantees, and bailouts of major market institutions, banks, and companies.” It is also urging that further steps be taken to enhance the governance of the International Accounting Standards Board in order to ensure its legitimacy and its ability to act independently, and without inappropriate political interference, in its standard-setting role. “The G20 leaders must act quickly to build a reformed international financial system,” said Ian Ball, IFAC Chief Executive Officer. “While some nations appear to be moving toward recovery from the financial crisis, underlying problems of accountability and transparency remain. We believe that the adoption of international standards can help to address these issues and play an essential role in resolving the current crisis.”“The G20 should acknowledge that small- and medium-sized enterprises are the engine of the global economy and address their unique needs,” emphasizes Robert Bunting, IFAC President. “IFAC’s letter emphasizes this and points out that those establishing regulations must take into account any related costs and complexities that will impose burdens on, and threaten the sustainability of, the small business sector.” IFAC’s letter to the G20 also includes recommendations on enhancing corporate governance, supporting the long-term strengthening of the accountancy profession in developing countries, and developing new tools and metrics to achieve global sustainability. The submission also asks the G20 to facilitate debate to resolve issues between financial reporting—designed to communicate business performance to investors—and prudential reporting—used to monitor and maintain financial stability. The letter with the full list of recommendations is posted on the IFAC website (http://www.ifac.org/financial-crisis/).

The recommendations reflect the views of the 60 leaders of accountancy organizations who attended the IFAC G20 Accountancy Summit, which took place in London, UK, July 23-24. They build on IFAC’s previous submission to the G20, which was issued prior to their April 2009 meeting.

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IFAC G20 Accountancy Summit issues renewed mandate for ADOPTION OF GLOBAL STANDARDS

(New York/July 24, 2009) – Governments and regulators need to step up initiatives to promote convergence to global accountancy and auditing standards—and they need to do so quickly—according to over 60 leaders of the accountancy profession who attended the International Federation of Accountants’ (IFAC’s) G20 Accountancy Summit on July 23 and 24 in London. The summit was organized to achieve consensus by the profession on a series of recommendations to be made to the G20 leaders prior to their meeting in September on issues related to the financial crisis.

Participants unanimously agreed that the public interest would best be served by a single set of high-quality, principles-based financial reporting and auditing standards for listed and public interest entities.

“It is critical that national standard-setting bodies establish roadmaps to move toward adoption of International Financial Reporting Standards and International Standards on Auditing,” emphasized Robert Bunting, IFAC President.

The group stressed the importance of having balanced views in the standard-setting process and ensuring that there is no undue influence from any one stakeholder group. They also emphasized the need for the International Accounting Standards Board to have a robust governance structure that will ensure its effectiveness and independence.

In addition, summit participants called upon governments to follow the same high standards of financial reporting as their private sector counterparts and to adopt International Public Sector Accounting Standards.

“The group expressed strong concerns about the liabilities and contingencies being assumed by governments in many countries as a result of the financial crisis,” explained IFAC Chief Executive Officer Ian Ball. “IFAC will continue to emphasize to the G20 the need for governments to provide clear and transparent reporting to their taxpayers and to capital markets.”

World Bank Chief Financial Management Officer Tony Hegarty addressed the group, highlighting the urgent need to develop and strengthen the profession in developing and emerging economies as a key step in achieving financial stability. He announced that the World Bank and IFAC will work together to develop a new initiative to deepen cooperation in this area. Summit participants supported this initiative and recommended that G20 governments should partner with the World Bank and IFAC to establish a framework for building sustainable capacity for the accountancy profession.

Other key recommendations from the group included the following:

· The needs of small and medium enterprises (SMEs) should be considered in the development of standards, as well as in any re-regulation. “SMEs are the economic engine of global growth and we need to ensure that they are not faced with any unnecessary or unintended compliance or other burdens,” stated IFAC President Robert Bunting.

· The G20 should continue to make strengthening corporate governance a priority. Focus should be placed on examining the role of independent directors, CFOs, and audit committees, as well as improving the linkage of remuneration schemes with performance.

· There is a need for a more robust financial reporting model that includes, among other things, reporting on sustainability and environmental issues.

These and other recommendations from the summit participants, who represented accountancy organizations in 17 of the G20 countries (see below), will be included in a communiqué sent to the G20 within the next two weeks.

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IFAC Members Participating in the G20 Accountancy Summit

Argentina Federación Argentina de Consejos Profesionales de Ciencias Económicas

Australia CPA Australia

Australia The Institute of Chartered Accountants in Australia

Australia National Institute of Accountants in Australia

Brazil Instituto dos Auditores Independentes do Brasil

Canada The Canadian Institute of Chartered Accountants

Canada Certified General Accountants' Association of Canada

Canada CMA Canada

France Compagnie Nationale des Commissaires aux Comptes

France Conseil Supérieur de l'Ordre des Experts-Comptables

Germany Institut der Wirtschaftsprüfer in Deutschland e.V.

Germany Wirtschaftsprüferkammer

India The Institute of Chartered Accountants of India

Indonesia Indonesian Institute of Accountants

Italy Consiglio Nazionale dei Dottori Commercialisti e Degli Esperti Contabili

Japan The Japanese Institute of Certified Public Accountants

Korea Korean Institute of Certified Public Accountants

Mexico Instituto Mexicano de Contadores Públicos, A.C.

Saudi Arabia Saudi Organization for Certified Public Accountants

South Africa The South African Institute of Professional Accountants

South Africa The South African Institute of Chartered Accountants

Turkey Expert Accountants' Association of Turkey

Turkey Union of Chambers of Certified Public Accountants of Turkey

UK The Association of Chartered Certified Accountants

UK The Chartered Institute of Public Finance and Accountancy

UK The Institute of Chartered Accountants of Scotland

UK The Chartered Institute of Management Accountants

UK The Institute of Chartered Accountants in England & Wales

United States American Institute of Certified Public Accountants

United States National Association of State Boards of Accountancy

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New IFAC Publication Explains How Better Costing Can Result in Better Management Decision-Making

(New York/July 23, 2009) – The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has released a new International Good Practice Guidance publication, Evaluating and Improving Costing in Organizations, which establishes six fundamental principles that can help professional accountants and their organizations to evaluate and improve their approach to costing. The guidance recognizes the importance of distinguishing between the purposes and information needs of cost accounting to meet the demands of external reporting, cost measurement, and reporting for internal decision support. A companion document, Costing Levels Maturity Model, has also been published to help professional accountants decide what level of costing sophistication to use given organizational requirements and the needs of managers and employees.

“Professional accountants have a significant role to play in ensuring that they, and the costing models and systems they use, provide relevant information and analysis to support performance evaluation and planning and management decisions,” says Roger Tabor, Chair of the PAIB Committee. “Good costing information is essential to interpret and analyze past performance. And it can be used predictively to guide decisions about many aspects of an organization’s future operations. These activities are different, and the guidance is designed to help professional accountants provide valuable information to their management customers.”

This IFAC guidance is targeted to professionals working in commerce and industry, as well as the public sector, education, and the not-for-profit sector. It recognizes that, when used effectively, costing can provide clear and timely information. The guidance cautions, however, that all cost information is not created equal: Highly aggregated cost information, for example, which is compiled for external reporting purposes, may not reflect such relationships closely enough to support future strategic and operational decisions.

The new Costing Levels Maturity Model can also help professional accountants exercise professional judgment to assess their organization’s existing costing capability for supporting internal managerial analysis and decisions. The PAIB Committee seeks comments from professional accountants and IFAC member bodies on the model to help its continued development.

Evaluating and Improving Costing in Organizations and Costing Levels Maturity Model can be downloaded free of charge from the PAIB section of the IFAC online bookstore at www.ifac.org/store. The PAIB Committee welcomes all feedback, which can be emailed to This email address is being protected from spam bots, you need Javascript enabled to view it .

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July 22, 2009

The IFAC Update provides summaries of IFAC developments over the past month.

REVISED CODE OF ETHICS ISSUED BY THE INTERNATIONAL ETHICS STANDARDS BOARD FOR ACCOUNTANTS

The International Ethics Standards Board for Accountants (IESBA) has issued a revised Code of Ethics for Professional Accountants (the Code), which clarifies requirements for all professional accountants and significantly strengthens the independence requirements of auditors. It becomes effective on January 1, 2011. The revisions include an extension of the independence requirements for audits of listed entities to all public interest entities, and a required cooling-off period before certain members of the firm can join public interest audit clients in certain specified positions. The full copy of the revised Code can be downloaded free of charge from the IFAC online bookstore at www.ifac.org/Store/.

COMMENTS REQUESTED ON EDUCATION STANDARDS BOARD’S PROPOSED PLAN FOR 2010-2012

The International Accounting Education Standards Board (IAESB) is seeking comments from member bodies, regulators, accounting firms, employers, the academic community, and others on an exposure draft of its 2010-2012 Strategy and Work Plan. The proposed plan focuses on three high-priority activities: conducting a revision of the International Education Standards (IESs), developing implementation guidance in areas of measurable implementation of the IESs, and promoting greater awareness of the IAESB’s pronouncements and its role in advancing debate on emerging issues relating to the development and assessment of professional accountants. Comments on the exposure draft are requested by October 5, 2009. The exposure draft may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the Submit a Comment link on the Exposure Drafts and Consultation Papers page.

ED 42 LAUNCHES ANNUAL IMPROVEMENT PROGRAM FOR INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS

To enhance the usability of International Public Sector Accounting Standards (IPSASs) and thus facilitate global convergence, the International Public Sector Accounting Standards Board (IPSASB) has launched an improvements project with the release of Exposure Draft (ED) 42, Improvements to IPSASs. This ED is the first of a proposed series of annual improvements to the IPSASs and is modeled on the successful annual improvements program developed by the International Accounting Standards Board (IASB). Comments on the ED are requested by September 30, 2009. The ED may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the Submit a Comment link on the Exposure Drafts and Consultation Papers page.

DEADLINE FOR 2009 ARTICLES OF MERIT CONTEST EXTENDED TO SEPTEMBER 3, 2009

The Professional Accountants in Business (PAIB) Committee has extended the deadline for nominations of articles for the 2009 Articles of Merit Award to September 3, 2009. The competition recognizes articles that provide distinct, valuable, and useful contributions to support professional accountants in business. Member bodies are encouraged to nominate articles that have previously been published in their journals or other publications and on their websites. Each member body may nominate up to three articles. The articles may cover any relevant aspect or current issue related to the roles and domain of professional accountants worldwide, whether employed in commerce, industry, the public sector, education, or the not-for-profit sector. For more information, contact Gabriella Teofilo, Operations Assistant, Professional Accountants in Business Committee, at This email address is being protected from spam bots, you need Javascript enabled to view it .

UPDATE ON PREPARATIONS FOR THE WORLD CONGRESS OF ACCOUNTANTS 2010

Progress continues in the preparations for the World Congress of Accountants (WCOA) 2010, which will be held from November 8–11, 2010 at the Kuala Lumpur Convention Center. Focused on the theme Accountants: Sustaining Value Creation, the event will feature 30 topics presented by globally renowned speakers. The Congress will host over 6,000 delegates, as well as global finance and business leaders, corporate and financial planners, investors, entrepreneurs, policy and standard setters, as well as key government officials. Over the past few months, WCOA 2010 organizers have met with a number of foreign trade missions regarding incentives and possible global promotional and marketing channels for the event. For more information about the Congress, please go to www.wcoa2010kualalumpur.com.

IFACnet VISITOR TRAFFIC UP DURING FIRST FOUR MONTHS OF 2009

Traffic for the IFAC KnowledgeNet, the global search engine customized for the accountancy profession (www.ifacnet.com), grew in a number of important areas during the time period from January 1 to April 30, 2009. The total number of unique visitors was up nearly 20%, to 26,475. These visitors were from 190 countries and jurisdictions (compared to 182 last year), representing 70 languages (compared to 60 last year). These included a significant number of visitors in Chinese, Dutch, Spanish, and Turkish. There were more than 150 websites, including 40 websites managed by IFAC member bodies and regional organizations, which directed users to IFACnet during the current reporting period. For more information on how to participate within IFACnet or to incorporate the link onto your website, e-mail This email address is being protected from spam bots, you need Javascript enabled to view it .

IFAC PUBLICATIONS TRANSLATED INTO ARABIC, FRENCH, AND SPANISH

Thanks to the kind assistance of member bodies and other outside contributors, IFAC’s translations function has recently posted translations of several key documents in Arabic, French, and Spanish on its online Translations Database at www.ifac.org/Translations/database.php.

Arabic translations:

· IFAC’s Statements of Membership Obligations 1-7, by the Saudi Organization for Certified Public Accountants

· 2009 IFAC Handbook of International Public Sector Accounting Pronouncements, by the Arab Society of Certified Accountants (ASCA – Jordan)

French translations:

· Guide to Using International Standards on Auditing in the Audits of Small and Medium-sized Entities (ISA Guide), by Néjib Sfayhi of Audit & Systems – Tunisia, with a summary prepared by Hechmi Abdelwahed, member of the IFAC Small and Medium Practices (SMP) Committee

· Guide to Quality Control for Small- and Medium-sized Practices, by CGA-Canada

Spanish translations:

· The ISA Guide, by Samuel Mantilla with ECOE Ediciones

· International Education Standards 1-8, by The World Bank

Translations of IFAC’s publications, as well as more information on IFAC’s policies on translation and reproduction, can be found on the IFAC website at www.ifac.org/Translations/.

IFAC WELCOMES NEW INTERNATIONAL FINANCIAL REPORTING STANDARD FOR SMALL AND MEDIUM ENTITIES

IFAC issued a press release welcoming the International Accounting Standards Board’s (IASB) new International Financial Reporting Standard (IFRS) for small and medium entities (SMEs), IFRS for SMEs. IFAC, largely through its SMP Committee, has closely followed and supported this project since its inception, providing input to the IASB to help find a solution that contributes to the quality of SME financial reporting without placing costly and unnecessary compliance burdens on SMEs. IFAC encourages its 157 member organizations to consider carefully how to use the standard in their respective jurisdictions.

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International Ethics standards boaRd for accountants ReleAses NeW Code; clarifies RequireMents and StrenGthens Independence

(New York/July 10, 2009) – The International Ethics Standards Board for Accountants (IESBA) has issued a revised Code of Ethics for Professional Accountants (the Code), clarifying requirements for all professional accountants and significantly strengthening the independence requirements of auditors. The revised Code has been released following the consideration and approval by the Public Interest Oversight Board (PIOB) of due process and extensive public interest consultation.

“Strong and clear independence standards are vital to investor trust in financial reporting,” emphasizes IESBA Chair Richard George. “The increase in trust and certainty that flow from familiarity with standards, including a common understanding of what it means to be independent when providing assurance services, will contribute immeasurably to a reduction in barriers to international capital flows.”

The revised Code, which is effective on January 1, 2011, includes the following changes to strengthen independence requirements:

· Extending the independence requirements for audits of listed entities to all public interest entities;

· Requiring a cooling off period before certain members of the firm can join public interest audit clients in certain specified positions;

· Extending partner rotation requirements to all key audit partners;

· Strengthening some of the provisions related to the provision of non-assurance services to audit clients;

· Requiring a pre- or post-issuance review if total fees from a public interest audit client exceed 15% of the total fees of the firm for two consecutive years; and

· Prohibiting key audit partners from being evaluated on or compensated for selling non-assurance services to their audit clients.

The revised Code maintains the principles-based approach supplemented by detailed requirements where necessary, resulting in a Code that is robust but also sufficiently flexible to address the wide-ranging circumstances encountered by professional accountants.

“This approach should also help to facilitate global convergence,” points out Mr. George.

The International Federation of Accountants’ Statements of Membership Obligations have as a central objective the convergence of a country’s national code with the Code of Ethics for Professional Accountants. Further, the requirements specify that member bodies should not apply less stringent standards than those stated in the Code.

“It is especially critical that member bodies focus on the implementation of the revised Code as soon as possible,” emphasizes Mr. George. “To help them in this process, the IESBA plans to provide them with some additional support and guidance in the coming months.”

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IFAC welcomes new sme reporting standard as important step in enhancing sme finaNcial statements

(New York/July 10, 2009) – The International Federation of Accountants (IFAC) and its Small and Medium Practices (SMP) Committee welcome the release of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) by the International Accounting Standards Board (IASB). IFAC encourages its 157 member organizations to carefully consider how to use the standard in their respective jurisdictions.

“This global accounting standard represents a very significant step on the path to global convergence of financial reporting practices by SMEs. It will contribute to enhancing the quality and comparability of SME financial statements around the world and assist SMEs in gaining access to finance,” remarks IFAC Chief Executive Ian Ball, adding, “The beneficiaries will be not only SMEs, but also their customers, clients, and all other users of SME financial statements.”

IFAC, largely through its SMP Committee, has been closely following and supporting this project since its inception. It has provided input to the IASB to assist it in reaching a solution that will contribute to the quality of SME financial reporting without placing costly and unnecessary compliance burdens on SMEs.

Sylvie Voghel, chair of the IFAC SMP Committee, points out, “This standard is a significant development; however, its issuance is not the end of the story, but rather the opening chapter. Consistent and effective implementation will demand a concerted international effort to mobilize the necessary support for companies and preparers. The development of free training materials by the International Accounting Standards Committee Foundation is a very positive step in this direction.”

Ms. Voghel adds, “The IASB will also need to monitor the implementation of the IFRS for SMEs and be prepared to revise and update it. Such flexibility is key to ensuring its continued relevance and usability.”

IFAC is currently considering the role it can play together with its member bodies to facilitate implementation of the new standard.

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International Education Standards Board Seeks Comments on Proposed Strategy for 2010–2012

(New York/July 7, 2009) - The International Accounting Education Standards Board (IAESB), a standard-setting board of the International Federation of Accountants (IFAC), is seeking comments from IFAC member bodies, regulators, accounting firms, employers, the academic community, and others on an exposure draft of its 2010–2012 Strategy and Work Plan. Organizations and individuals with an interest in accounting education are invited to respond to the IAESB's proposals for its strategic direction, projects, and activities for the next three years.

"Accounting education remains a fundamental pillar in improving the reliability of financial reporting and continues to be needed by accountants to serve the public interest," states Mark Allison, IAESB Chair. "The aim of the IAESB 2010–2012 Strategy and Work Plan is to bring clarity to requirements that are needed to develop high-quality accounting education programs."

The IAESB's proposed strategy focuses on projects and activities aimed at developing International Education Standards (IESs), while providing adoption and implementation guidance to interested stakeholders in accounting education. This will assist IFAC's member bodies in increasing the capacity and capability of the global accountancy profession, contributing to strengthened public trust.

The IAESB proposes to undertake three high-priority activities, beginning in 2010. These are:

· Conducting a revision of the IESs, considering results of the IAESB’s drafting conventions project and recent developments in the accountancy profession;

· Developing implementation guidance in areas of measurable implementation of the IESs, competency frameworks, and quality control measures for education providers; and

· Promoting greater awareness among academics, regulators, and others of the IAESB’s pronouncements and its role in advancing international debate on emerging issues relating to development and assessment of professional accountants.

The direction of further activities during the period of 2010–2012 will be conditional on the outputs from these three projects, although the IAESB's proposed work program for 2010–2012 contains a number of potential projects for consideration.

How to Comment

Comments on the exposure draft are requested by October 5, 2009. The exposure draft may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the “Submit a Comment” link on the Exposure Drafts and Consultation Papers page. Please note that first-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IAESB Technical Manager at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

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July 2, 2009

In This Issue:

1.   IOSCO Endorses Clarity Project, ISAs
2.   EC Consults on Adoption of ISAs
3.   IAASB Approves Project on Auditing Guidance for Complex Financial Instruments
4.   Development of Standards for Alternative Services to the Audit
5.   Greenhouse Gas Statement Project Progresses
6.   Discussion Continues on Pro Forma Financial Information
7.   IAASB Moves Ahead on XBRL, ISAE 3000, ISA 610
8.   IAAER and ACCA Call for Proposals on IAASB Issues
9.   New ED Comment Submission System Launched
10. IFAC Annual Report Released: Features CAG Reports

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1. IOSCO Endorses Clarity Project, ISAs

The International Organization of Securities Commissions (IOSCO) has issued a statement welcoming the completion of the Clarity Project by the International Auditing and Assurance Standards Board (IAASB), as well as recognizing the important role played by International Standards on Auditing (ISAs) "in facilitating cross-border securities offerings and listings."

In the statement, IOSCO also endorsed the clarified standards, encouraging securities regulators to accept audits performed and reported under the new ISAs.

The IOSCO Statement on ISAs can be viewed at the organization's website www.iosco.org.

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2. EC Consults on Adoption of ISAs

The European Commission (EC) has launched a public consultation to determine whether ISAs should be adopted in the European Union (EU). In its consultation paper, the Commission commented on the IAASB's governance and due process, stating that the "the current governance of the IAASB has matured to a stage where it may be justifiable to adopt ISAs in the European Union." A study undertaken by the University of Duisburg-Essen indicates that "an adoption of the ISAs in the EU would result in quantitative and qualitative benefits for companies, investors, and regulators, stemming from high quality and harmonized audits." The study can be viewed at http://ec.europa.eu/internal_market/auditing/isa/index_en.htm.

Interested parties are invited to respond by accessing the EC ISA Consultation Website at http://ec.europa..eu/internal_market/consultations/2009/isa_en.htm. Comments are requested by September 15, 2009.

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3. IAASB Approves Project on Auditing Guidance for Complex Financial Instruments

The IAASB has approved a project aimed at updating guidance on audits of derivative financial instruments to address issues resulting from the evolving financial environment, as well as developments related to the completion of the Clarity Project.

The project will involve:

The development of a briefing paper to raise awareness and highlight a number of practical considerations currently posing challenges in audits of complex financial instruments; and
The revision of International Auditing Practice Statement (IAPS) 1012, Auditing Derivative Financial Instruments, to bring it in line with the clarified ISAs and, as appropriate, further expand it for additional guidance for auditors when applying ISAs in the context of complex financial instruments.
The IAASB will consider a draft of the briefing paper at its September 2009 meeting.

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4. Development of Standards for Alternative Services to the Audit

During its June meeting in Lisbon, the IAASB considered key directional matters concerning its project to develop standards for services that provide acceptable alternatives to an audit of financial statements. The initial focus of the project is to revise International Standard on Review Engagements (ISRE) 2400, Engagements to Review Financial Statements, and International Standard on Related Services (ISRS) 4410, Engagements to Compile Financial Statements. The objective of these revisions is to establish robust standards for review and compilation services as existing alternative services to the audit of financial statements.

The project is linked to the strategic priority of addressing the needs of small- and medium-sized entities (SMEs) and small and medium practices for assurance and related services in settings where there are no mandatory audit requirements. There is a need for alternative assurance services in the regulatory environments of both developed and emerging economies, where the audit may often exceed what users require in terms of both service and cost. A primary consideration is to address SME clients' needs through alternative services that give them a viable choice of different services, or combinations of services, that meet their needs in an appropriate and cost-effective manner.

The IAASB will consider an issues paper on the subject in September 2009.

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5. Greenhouse Gas Statement Project Progresses

During the June IAASB meeting in Lisbon, the Emissions Task Force presented the board with a first draft of a proposed International Standard on Assurance Engagements (ISAE) 3410, Assurance on a Greenhouse Gas Statement. The proposed standard deals with engagements to report on greenhouse gas (GHG) statements undertaken by assurance professionals.

The IAASB was asked to provide direction to the task force on the proposed ISAE 3410, as well as on issues related to the development of this standard, such as whether the requirements of a number of ISAs should be applied to assurance engagements on GHG statements. The task force also sought the IAASB's input on a number of GHG-related concepts, such as suitable criteria, levels of assurance, and emissions deductions.

The IAASB will consider a revised draft of the proposed ISAE 3410 for approval for exposure at its September 2009 meeting.

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6. Discussion Continues on Pro Forma Financial Information

The IAASB, during its March meeting in New York, discussed significant issues relating to the development of an international assurance standard for engagements to report on the proper compilation of pro forma financial information included in a prospectus.

To facilitate the discussion, the board considered an issues paper on the subject that had been developed by the Pro Forma Task Force. Topics addressed included: definitions of relevant terms; nature and level of assurance to be provided; engagement acceptance considerations; and reporting considerations.

The IAASB will consider a first draft of the proposed ISAE at its September 2009 meeting.

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7. IAASB Moves Ahead on XBRL, ISAE 3000, ISA 610

During its March meeting, the IAASB approved the following three projects:

Guidance on eXtensible Business Reporting Language (XBRL)-The project will consist of two stages. The first part will involve consultation to obtain views about the development of a pronouncement to address the performance and reporting expectations of the auditor in connection with audited financial statements that are accompanied by XBRL data. The second stage will involve the development of the pronouncement itself.
Revision of ISAE 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information-The standard establishes basic principles and essential procedures for all assurance engagements other than audits or reviews of historical financial information covered by ISAs or ISREs. The revision will incorporate enhanced requirements and guidance, adopt clarity drafting conventions, and consider whether separate ISAEs are needed on topics such as planning, using the work of experts, and documentation.
Revision of ISA 610 (Redrafted), Using the Work of Internal Auditors-The scope of this project will be to revise ISA 610 (Redrafted) to reflect developments in the internal auditing environment and changes in practice regarding the interactions between the external and internal auditors.
More information about these three projects is available on the Meeting Summary for the IAASB's March meeting.

At its June meeting in Lisbon, the IAASB considered an initial issues paper on the ISAE 3000 project that focused on scoping and directional issues.

The IAASB will consider an issues paper for each of these three projects at its September 2009 meeting.

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8. IAAER and ACCA Call for Proposals on IAASB Issues

The International Association for Accounting Education and Research (IAAER) and the Association of Chartered Certified Accountants (ACCA) are calling for research projects to inform and support the work of the IAASB. Up to five research grants of US$25,000, funded by ACCA, will be awarded under the program. Topics of potential interest include, but are not limited to, trends and developments, conceptual aspects and international convergence and implementation.

The deadline for submission of preliminary proposals is September 15, 2009. All proposals are to be submitted electronically to the Program Coordinator at the following email address This email address is being protected from spam bots, you need Javascript enabled to view it . All questions about the program or proposal process should also be directed to the above email address.

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9. New ED Comment Submission System Launched

IFAC has launched a new system for visitors to electronically submit comment letters for any exposure draft (ED) or consultation paper. With this new process, online users will be able to register on the IFAC website, log in to submit comment letters, and track comments they have submitted. The new system streamlines the submission process.

The new comment letter submission system is accessible through "My IFAC Homepage," where registered users can also access the public areas of the IFAC website. Registered users may participate in the Global Financial Crisis and Small and Medium Practices discussion boards and in the Professional Accountants in Business Dynamic Links page.

To register, visit www.ifac.org and click on the Login/Register link located in the left-hand navigation.

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10. IFAC Annual Report Released: Features CAG Reports

IFAC has released its 2008 annual report, which highlights initiatives to help restore financial stability and the need for convergence to global standards. The report features messages from Immediate Past President Fermín del Valle, Chief Executive Officer Ian Ball, and Public Interest Oversight Board Chairman Stavros Thomadakis.

The report gives information on IFAC's Service Delivery for 2008 in five areas, including Standards and Guidance, Promoting Quality, International Collaboration Activities, Representation of the Accountancy Profession in the Public Interest, and Information Services.

This year, reports are also provided from the Consultative Advisory Groups for the International Auditing and Assurance Standards Board, the International Accounting Education Standards Board, and the International Ethics Standards Board for Accountants.

The 2008 annual report can be downloaded from the IFAC website at www.ifac.org/About/Publications.php.

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IPSASB INITIATES ANNUAL IMPROVEMENTS PROGRAM WITH RELEASE OF NEW EXPOSURE DRAFT

(New York/June 30, 2009) – To enhance the usability of International Public Sector Accounting Standards (IPSASs) and thus facilitate global convergence, the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has launched an improvements project with the release of Exposure Draft (ED) 42, Improvements to IPSASs. This ED is the first of a proposed series of annual improvements to the IPSASs and is modeled on the successful annual improvements program developed by the International Accounting Standards Board (IASB).

The proposed amendments in the ED are related primarily to the recognition, measurement, or disclosure requirements but do not represent substantive revisions to the content of existing standards. They reflect changes made by the IASB to related International Financial Reporting Standards.

“The financial reporting world of the public sector is a dynamic one,” states Mike Hathorn, IPSASB Chairman, “and it is necessary for the IPSASB to continually reassess the IPSASs to ensure that they are relevant to users of public sector financial statements and easy to use by preparers of financial statements.”

How to Comment

Comments on ED 42 are requested by September 30, 2009. The ED may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the “Submit a Comment” link on the Exposure Drafts and Consultation Papers page. Please note that first-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to This email address is being protected from spam bots, you need Javascript enabled to view it and This email address is being protected from spam bots, you need Javascript enabled to view it . Comments can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

17 JIFAC Applauds US Administration’s Support for Global Accounting Standards in US Financial Reform Proposal

(New York/June 18, 2009) – The International Federation of Accountants (IFAC) applauds the call by the US President for urgent progress toward the “development of a single set of high-quality global accounting standards.” These standards were one element of the proposal for regulatory reform, issued at a press conference on Wednesday, that Mr. Obama called “necessary to avoid another financial crisis.”

"The president’s acknowledgment of the importance of developing a high-quality set of global accounting standards reflects the importance of global standards and a level playing field in financial reporting,” says Ian Ball, Chief Executive Officer, IFAC. He also noted that the US position is consistent with the G-20’s call for “substantial progress by year-end 2009.” IFAC wrote to the G-20 in support of convergence to global standards before their meeting in London last April.

Convergence to global standards is an idea that IFAC supports strongly—not only in accounting but also in auditing, ethics, and public sector accounting standards, all of which are important to the functioning of global capital markets.

The complete White Paper issued by Mr. Obama’s office, prepared by the United States Treasury Department, can be found at http://www.financialstability.gov/docs/regs/FinalReport_web.pdf.

une 2009

In This Issue:

Features

1. IFAC Launches Review of Support for SMEs and SMPs
2. IFAC President Robert Bunting Furthers Public Debate on SME Issues
3. European Commission Progresses on "Think Small First" Principle
4. Debate Grows on EC Proposal to Abolish Micro-Entity Reporting Requirements
5. Share Your Thoughts on Important Issues on the SMP/SME Discussion Board

News from IFAC

6.   Translation Work Started on Quality Control Implementation Guide for SMPs
7.   IFAC Releases Annual Report
8.   IFAC Launches New Comment Letter Submission System
9.   French Translation of ISA Guide Complete
10. SMP Committee Expands Resources Available at Small and Medium Practices Website
11. Information Now Available for SMP Committee's NY Meeting; Next Meeting Set for Beijing

More News from Around the Globe

12. AICPA Makes IFRS Roadmap Suggestions; Proposes Changes to Compilation/Review Services
13. AUASB Issues Explanatory Guide to Proposed New Standards on Auditors' Reports
14. CPA Australia Develops Public Practice Communiqué on QA Breaches
15. French Institute Launches SMP Website
16. Hong Kong Develops SMP/SME Resource Center
17. Malta Amends Companies Act to Adopt GAPSE
18. New African Standards for SMEs Near Finalization
19. Share SMP eNews with Your Colleagues

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Features:

1. IFAC Launches Review of Support for SMEs and SMPs

During its February 2009 meeting in New York, the IFAC Board concentrated a significant part of its discussion on issues facing small- and medium-sized enterprises (SMEs) and SMPs, as well as on how IFAC can best support this constituency. The Board duly approved that a process be established to explore how IFAC can best support its SMP constituency. Accordingly, an SMP Review Task Force (RTF), chaired by Bernadette McGrory-Farrell, has been established by the Planning and Finance Committee (PFC).

The objective of the SMP RTF is to determine the range of activities that IFAC should undertake in support of the SME sector of the economy and its SMP constituency. The first step in this review process has been to conduct an online SMP survey of IFAC member bodies and regional organizations which asked about the awareness and usefulness of existing IFAC SMP-related initiatives and the importance of IFAC undertaking additional activities. Some 97 responses from 83 member bodies spanning 67 countries have been received.

The survey responses are currently being analyzed and will serve as the basis for some proposals on which the task force will consult. The task force is expected to report back to the IFAC Board with its recommendations in either November 2009 or February 2010.

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2. IFAC President Robert Bunting Furthers Public Debate on SME Issues

In speeches and interviews, IFAC President Robert Bunting continues to further public discussion on issues important to small and medium practices and small- and medium-sized enterprises (SMEs).

For example, in an April 16, 2009 speech before the World Bank, Mr. Bunting discussed the global significance of SMEs and Micro-Entities, including their roles as growth incubators and job creators in both developing and developed countries. In this speech, Mr. Bunting also addressed the unique challenges faced by SMEs in the financial crisis, including problematic access to capital and credit, rising costs of fuel and supplies and the need to cost effectively meet regulatory and compliance requirements. Mr. Bunting stressed the need for regulatory initiatives to consider these needs to ensure that unnecessary or unintended, financial or other, burdens are not placed upon such businesses. The speech was discussed in an April 21, 2009 article within the Journal of Accountancy.

Other IFAC speeches can be accessed at www.ifac.org/MediaCenter/?q=speech.

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3. European Commission Progresses on "Think Small First" Principle

In order to help policy makers and regulators better attend to the needs and concerns of small- and medium-sized enterprises (SMEs), the Small Business Act of the European Union endorses a principle called "Think Small First." The principle implies that policy makers give full consideration to SMEs at the earliest policy development stages and that SMEs should be considered the prime customers for business regulation. All rules impacting business should be created from the SME point of view first..

To promote the wide-spread application of "Think Small First," the European Commission (EC) created a group of experts representing the viewpoints of various national administrations. The group issued a report in March 2009 on the subject, outlining a number of good practices related to the principle at the national and European Union level.

The report can be accessed at www.ec.europa.eu/enterprise/entrepreneurship/docs/sba/report_think_small_first.pdf.
The report's executive summary can be accessed at
www.ec.europa.eu/enterprise/entrepreneurship/docs/sba/report_think_small_first_summary.pdf.

This EC effort, in addition to others addressing the needs of SMEs, is generating a growing amount of public support from relevant stakeholders, including the European Federation of Accountants and Auditors for SMEs.

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4. Debate Grows on EC Proposal to Abolish Micro-Entity Reporting Requirements

Discussion continues on a new proposal put forward by the European Commission (EC), which would allow Member States to completely abolish financial reporting obligations for Europe's smallest companies (commonly referred to as micro-entities). In particular, the proposal would amend European Council Directive 78/660/EEC such that a new category of micro-entity businesses (to be defined as having a net turnover of less than €1 million) would be exempt from the European Union's Fourth Company Law Directive. The proposal was flagged in the European Economic Recovery Plan in November 2008, and has now passed to the European Parliament and the Council of Ministers for consideration.

More information on the proposal is provided by the European Commission on the following website:
www.ec.europa.eu/internal_market/accounting/sme_accounting/index_en.htm.

The leadership of the Institute of Chartered Accountants of Scotland argues that the benefits of this proposal are doubtful. A full copy of the Institute's response can be found on this website:
www..icas.org.uk/site/cms/contentviewarticle.asp?article=6119.

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5. Share Your Thoughts on Important Issues on the SMP/SME Discussion Board

The SMP Committee would like to hear from practitioners worldwide on the subject of micro-entity reporting and other important issues impacting small and medium practices. Please share your views on the SMP/SME Discussion Board.

To post your views, or read the views of others, please join the public discussion on the committee's SMP/SME Discussion Board.

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News from IFAC:

6. Translation Work Started on Quality Control Implementation Guide for SMPs

A number of translations are now in progress for the Guide to Quality Control for Use by Small- and Medium-sized Practices, including one in French by CGA-Canada and one in Portuguese by Instituto dos Auditores Independentes do Brasil (IBRACON).

The guide is designed to help SMPs understand and efficiently apply International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services, as redrafted under the International Auditing and Assurance Standards Board's Clarity Project.

The guide was developed by CGA-Canada for IFAC's SMP Committee and uses an integrated case study to illustrate how to implement the requirements of ISQC 1. It also includes two sample firm policy manuals, as well as key checklists and forms.

It can be downloaded free of charge from IFAC's online bookstore at www.ifac.org/Store/. A Microsoft Word version is available to allow for translation and adaptation by institutes and small firms.

To learn more about the translations planned for the Guide, please refer to the translations database at www.ifac.org/Translations/database.php.

In addition to translating the Guide into Portuguese, IBRACON will also offer training to members when the translation is completed.

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7. IFAC Releases Annual Report

The 2008 annual report can be downloaded from the IFAC website at www.ifac.org/About/Publications.php. Print copies will be sent to all member bodies, associates, regional organizations, boards and committees, and other stakeholders.

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8. IFAC Launches New Comment Letter Submission System

IFAC has launched a new comment letter submission system that allows visitors to the IFAC website to submit comment letters electronically on any IFAC exposure draft or consultation paper.

Website users can register on the IFAC website and then log in to submit comment letters and track comments they have submitted. This new system streamlines the submission process and helps to ensure that comment letters are processed promptly by IFAC staff.

The new comment letter submission system is accessible through "My IFAC Homepage," where registered users can also access the public areas of the IFAC website. Registered users may participate in the Global Financial Crisis and Small and Medium Practices discussion boards and in the Professional Accountants in Business Dynamic Links page. Through these social media tools, professional accountants may share their ideas, exchange resources, and make connections with other accountants.

Visit www.ifac.org and click on the Login/Register link located in the left-hand navigation to register now.

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9. French Translation of ISA Guide Complete

A French translation of the Guide to Using International Standards on Auditing in the Audits of Small- and Medium-sized Entities is now available on the IFAC Translations Database.

The French ISA Guide can be accessed at web.ifac.org/download/TRADUCTION_ISA_GUIDE.pdf.

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10. SMP Committee Expands Resources Available at Small and Medium Practices Website

The SMP Committee has updated many of the resources available at the International Center for Small and Medium Practices, located within the IFAC website. The Center provides access to previous SMP eNews documents, links to various resources, relevant sites and IFAC speeches, as well as information on recent SMP Committee meetings.

For example, links have been added to the following resource sections:

Global Financial Crisis
Relevant Links
Viewers can access the SMP resources by going to the following web address: www..ifac.org/SMP/relevant_links.php.

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11. Information Now Available for SMP Committee's NY Meeting; Next Meeting Set for Beijing

A Meeting Summary has been posted for the SMP Committee's May 21-22 Meeting in New York. It can be accessed at www.ifac.org/SMP/Committee.php.

In addition, the next meeting for the Committee, scheduled for October 29-30, will be held in Beijing. The SMP Forum will also be held in Beijing on October 28.

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More News from Around the Globe:

12. AICPA Makes IFRS Roadmap Suggestions; Proposes Changes to Compilation/Review Services

The American Institute for Certified Public Accountants (AICPA) has recommended some amendments to the proposed roadmap for adopting International Financial Reporting Standards (IFRSs) within the United States, promulgated by the US Securities and Exchange Commission. These amendments include a push to minimize dual recordkeeping requirements and a call for optional early adoption to be expanded to include smaller companies.

The AICPA's Accounting and Review Services Committee (ARSC) also released an exposure draft that would revise the standards for compilation and review engagements. The changes are designed to address concerns of small businesses, users of small-business financial statements, and CPAs who serve smaller entities. They would allow an accountant to issue a review report on financial statements when the accountant's independence is impaired by performing non-attest services that were designed to improve the reliability of the client's financial information. You can read the full article in the Journal of Accountancy and view a short video, in which AICPA President and CEO Barry Melancon discusses the proposals and the importance of this project.

Moreover, the AICPA's Private Companies Practice Section commissioned research that provided support to the ARSC as it developed the proposed Statements on Standards and Review Services (SSARs). The research is summarized in a report entitled An Empirical Test of the Reliability Framework: Evidence From Banking Professionals that is available for download from http://pcps.aicpa.org/NR/rdonlyres/AE3385D9-707A-4DA9-A2CF-AEFABCE6EEEB/0/AICPA_PCPS_Reliability_Report.pdf.

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13. AUASB Issues Explanatory Guide to Proposed New Standards on Auditors' Reports

The Australian Auditing and Assurance Standards Board (AUASB) has issued an Explanatory Guide to a series of proposed new standards on auditors' reports. The proposed standards, involving the Australian Auditing Standard (ASA) 700 and ASA 800 series, are the result of an initiative by the AUASB to revise and redraft these standards using the equivalent "clarity" versions of the International Standards on Auditing as issued by the International Auditing and Assurance Standards Board. The standards will be operative for financial reporting periods commencing on or after January 1, 2010.

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14. CPA Australia Develops Public Practice Communiqué on QA Breaches

CPA Australia issued in March a public practice communiqué that addresses the most common breaches in quality assurance and offers new resources for managing the global credit crisis, as well as new links to global accounting resources.

The organization maintains a web page devoted to small and medium businesses, offering information and tools for supporting unlisted companies with less than 200 staff or annual turnover under A$50 million.

CPA Australia also operates a web page that discusses many issues related to auditing of small incorporated associations in Australia. Since the introduction of new auditing standards in 2006, there has been considerable debate about the impact of these standards on the quality and cost of audits, particularly for smaller entities, such as clubs and kindergartens.

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15. French Institute Launches SMP Website

The Conseil Supérieur de l'Ordre des Experts-Comptables has launched a website addressing the needs of SMPs resulting from the credit crisis. The site provides resources on at least 20 issues, such as declining sales, lack of capital, and hiring. The resources include advice, reports, guidance, and links to relevant sites.

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16. Hong Kong Develops SMP/SME Resource Center

The Hong Kong Institute of Certified Public Accountants has launched an online resource center for small- and medium-sized enterprises (SMEs) and SMPs. The center provides news, guidance, information on standards, technical updates and a members' handbook. Other resources include staff summaries on important issues, auditing bulletins, example reports, and a financial crisis database.

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17. Malta Amends Companies Act to Adopt GAPSE

Malta has amended its Companies Act to adopt General Accounting Principles for Smaller Entities (GAPSE).

The GAPSE is a special set of standards that can be used by entities that meet the following criteria:

Have fewer than 250 employees;
Have assets below €17.5 million;
Have revenue below €35 million;
Are not publicly traded; and
Are not financial institutions.
Since 1995, all limited liability companies in Malta, irrespective of size, have been required to prepare annual financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Many over the years have considered this requirement to becoming increasingly onerous for local smaller entities. As a result the Malta Institute of Accountants started the initiative to draw up GAPSE. GAPSE provides a historical cost option for all assets and liabilities but allows alternative measurement bases in particular circumstances. It contains significantly reduced disclosure requirements compared to IFRSs.

More information about this initiative can be found at www.maltamediaonline.com/?p=5432.

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18. New African Standards for SMEs Near Finalization

A new set of accounting standards under development for small businesses in Africa is nearing finalization.

They are being developed by a working group that consists of a number of representatives from various institutions and associations, such as the South African Institute of Chartered Accountants, the University of Johannesburg, the Association of Chartered Certified Accountants, the Independent Regulatory Board for Auditors, and the South African Revenue Service.

The standards are expected to contain less stringent reporting requirements for small businesses that would be easier to grasp and apply.

To learn more about the project, see www.allafrica.com/stories/200903030623.html.

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19. Share SMP eNews with Your Colleagues

The SMP Committee issues regular eNews updates to keep you current on its activities and recent publications. Please forward this eNews to any interested colleagues and advise them that they can subscribe to receive this eNews by following these simple steps:

Go to the eNews sign-up page at www.ifac.org/E-news/index.tmpl.
Enter your email address, name, and country.
Select "SMP eNews" from the check list as well as any other eNews alerts that you would like to receive.
You will receive the next issue of the SMP eNews directly in your inbox.

15 June 2009

Dear IFAC Members, Associates, and Regional Accountancy Organizations:

Please find below the link to the June 2009 issue of the IFAC Global Digest, which features news items obtained from the websites of IFAC member bodies and related organizations.

http://membernet.ifac.org/GlobalDigest/2009_06_Global_Digest.php

The following news items are featured in this issue of the Digest:

Financial Crisis News and Resources

1. ACCA-Sponsored Report Reveals SME Concerns in UK

2. AICPA Survey Shows Easing of Economic Pessimism

3. CIMA Addresses Stress Tests and Public Interest in Two Papers

4. European Commission Hosts Conference on Financial Crisis

5. Financial Crisis Advisory Group’s London Meeting Focuses on Oversight, Final Report

6. IASB Proposes Fair Value Guidance; Issues Update on IAS 39

7. ICAEW Survey Reveals Rise in Confidence

8. UK FRC Annual Report Raises Concerns for EU Adoption of IFRS

9. UK House of Lords Outlines Recommendations for Reforming Bank Sector

10. US Financial Service Groups Write Congress Urging Changes in Mark-to-Market

Additional News from Member and Regional Accountancy Bodies

1. ACCA Signs MoU with Saudi Arabia

2. AICPA Releases Survey on IFRS

3. Canadian Institute Survey Shows Hiring Decline Likely in 2009

4. CIMA Survey Reveals Job Optimism of Accounting Students

5. CPA Ireland and CGA-Canada Enter Into Strategic Agreement

6. ICAEW Partners with Three UK Universities

7. Malaysian Institute Establishes Ethics and Auditing Standards Boards

8. Singapore Institute Unveils Strategic Plan

Additional News from International and Other Organizations

1. IOSCO Expresses Support for Clarified ISAs

2. Basel Committee Issues Working Paper on Interaction of Market and Credit Risk

3. EFRAG 2008 Annual Review Highlights Major Activities and Enhancements

4. FASB to Launch Accounting Standards Codification on July 1, 2009

5. Financial Reporting Council Publishes Paper on Reducing Complexity

6. IASB Proposes Amendments to Clarify Accounting for Pension Plan Prepayments

7. US SEC Develops New Safeguards for Custody of Client Funds

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IFAC WELCOMES IOSCO SUPPOrT OF New Clarity isas and their role in BUILDING Investor Confidence

(New York/June 11, 2009) – The International Federation of Accountants (IFAC) and the International Auditing and Assurance Standards Board (IAASB) welcome the statement released today by IOSCO on International Standards on Auditing (ISAs) that recognizes the important role of ISAs “in facilitating cross-border securities offerings and listings.” The IOSCO statement also welcomes the achievement of the completion of the Clarity Project, noting the improvements that have been made as a result of clarifying the ISA requirements.

“IOSCO’s endorsement of the clarified ISAs and its encouragement of securities regulators to accept audits performed in accordance with the clarified ISAs is consistent with the IAASB’s long-held objective of developing and promoting adoption of a high-quality set of auditing standards for use in all audits worldwide,” states IAASB Chair Arnold Schilder.

IFAC, in its letter to the G-20 Working Group 1 in March, expressed its view that the global adoption of ISAs will improve the quality and consistency of the audit of financial information. Currently, more than 100 jurisdictions around the world use ISAs or base their national standards on them. Increased adoption of ISAs will facilitate greater transparency and result in higher standards of accountability.

“The IOSCO statement is testimony to the success of the standard-setting process for International Standards on Auditing, in which responsibility is shared between the public sector and the private sector,” states IFAC President Robert Bunting. “It is vital that the standard-setting process operates in, and is seen to operate in, the public interest. Oversight of the IAASB’s work by the Public Interest Oversight Board (PIOB) and the role of the IAASB’s Consultative Advisory Group play critical roles in ensuring that the standards do reflect the public interest.”

The IOSCO statement echoes support for the clarified ISAs expressed by the World Bank and the Basel Committee on Banking Supervision.

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IFAC Board Organizes G-20 Accountancy Summit; Focuses on INITIATIVES TO STRENGTHen THE PROFESSION

(New York/June 8, 2009) – During its meeting in Dublin, Ireland, last week, the Board of the International Federation of Accountants (IFAC) agreed to hold a G-20 Accountancy Summit on July 23–24 to obtain the perspectives of accountancy institutes on how the profession can best contribute to strengthening the global financial system.

“Our goal is to identify and summarize the collective viewpoints of IFAC and accountancy institutes in G-20 countries and to submit these to the G-20 Working Groups prior to their September meeting,” says IFAC President Robert Bunting. “This will be a follow up to IFAC’s letter to three G-20 Working Groups in March, in which we indicated our support of their recommendations to implement international standards, improve the international regulatory framework, and strengthen the roles of the International Monetary Fund and the World Bank.”

During the meeting, Board members considered the implications of the financial crisis and heard reports from the chairs of IFAC’s independent standard-setting boards on their initiatives to update and develop new international auditing, education, ethics, and public sector accounting standards, particularly in those areas that would help the profession to address issues related to the financial crisis, and to adopt and promote their adoption and use by a wide group of stakeholders. Such adoption and implementation is vital to improving the transparency of the financial system and is consistent with G-20 recommendations.

In addition, the Board discussed how IFAC can best support small and medium practices, including assisting them in addressing issues emerging from the financial crisis and increasing awareness of the role of professional accountants in business in risk management, corporate governance, and transparent financial reporting.

“In addressing the current financial crisis, IFAC has remained focused on its commitment to serving the public by strengthening the profession and working together with other constituencies—business leaders, governments, international organizations, and regulators—to strengthen financial reporting and auditing,” emphasizes Mr. Bunting

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28 May 2009

In This Issue:

1. Outcomes of February and May 2009 IPSASB Meetings
2. IPSASB Proposes New Requirements on Reporting of Financial Instruments
3. New Guidance Strengthens Reporting of Intangible Assets and Entity Combinations
4. IPSASB and IMF Continue Strong Partnership
5. Review Launched into Cash Basis IPSASs
6. IPSASB Releases 2009 ISPAS Handbook; French and Spanish Translations of 2007 Handbook
7. IPSASB 2009 Meeting Dates
8. Share IPSASB eNews with Your Colleagues

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1. Outcomes of February and May 2009 IPSASB Meetings

Meeting Highlights from the IPSASB's February meeting in Paris, France are now available in English, French, and Spanish. The Meeting Highlights from the May IPSASB meeting in Washington, DC will be available shortly. At the past two meetings, the IPSASB discussed the following topics, among others:

Convergence with International Financial Reporting Standards (IFRSs) - Consistent with its strategy to substantially converge International Public Sector Accounting Standards (IPSASs) at December 31, 2009 with IFRSs issued by December 31, 2008, the IPSASB has approved six Exposure Drafts (EDs). These include three EDs on Financial Instruments (see item 2 below for details), ED 36 on Agriculture, and EDs 40 and 41 on Intangible Assets and Entity Combinations from Exchange Transactions.
Conceptual Framework - The IPSASB has started its review of the 55 responses received to the Phase 1 Consultation Paper and continues to consider and develop positions on the subsequent phases dealing with definition and recognition of elements and measurement. Work will continue on all phases of the Conceptual Framework throughout the remainder of 2009.
Long-Term Fiscal Sustainability - The IPSASB has been discussing a draft Consultation Paper that is being developed and anticipates approving this in September 2009.
Service Concession Arrangements (SCAs) - The IPSASB is developing an ED for approval by the end of 2009 that uses a control-based approach for asset recognition by public sector grantors. The principles of the proposed ED will be consistent with the Consultation Paper on SCAs that was issued in March 2008.
Cash Basis Review - See item 5 below for details.
Meeting Highlights and background papers of all past IPSASB meetings can be viewed at http://www.ifac.org/PublicSector/Meetings.php.

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2. IPSASB Proposes New Requirements on Reporting of Financial Instruments

The IPSASB has proposed new financial reporting requirements to assist public sector entities in accounting for financial instruments, such as derivatives, bonds, and loans. Public sector reporting of these instruments has become important due to the unprecedented scale of government intervention in the financial sector.

These new requirements are contained in three new exposure drafts (EDs):

ED 37, Financial Instruments: Presentation;
ED 38, Financial Instruments: Recognition and Measurement; and
ED 39, Financial Instruments: Disclosures.
The three EDs propose IPSASs that converge with the International Accounting Standards Board's standards for financial instruments as at Dec. 31, 2008, with limited changes.

While the intention of the International Accounting Standards Board (IASB) is to modify aspects of its current standards relating to the measurement of financial instruments, the IPSASB will nonetheless continue its full consultation on the exposure drafts and consider any changes ultimately adopted by the IASB in due course. The IPSASB believes the public sector and its constituents are best served by having International Public Sector Accounting Standards (IPSASs) on financial instruments and removing reliance on the hierarchy at this time. The IPSASB strategy will provide stability for users and allow the IPSASB to manage the current period of uncertainty. The current global financial crisis underlines the importance of consistent financial reporting by governments of their exposures to financial instruments.

The EDs may be viewed by going to www.ifac.org/EDs. Comments are requested by July 31, 2009 and may be submitted electronically by registering online at www.ifac.org. To register, click on the Login/Register link located in the website's left-hand navigation. Comments are still being accepted by email to This email address is being protected from spam bots, you need Javascript enabled to view it or This email address is being protected from spam bots, you need Javascript enabled to view it .

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3. New Guidance Strengthens Reporting of Intangible Assets and Entity Combinations

The IPSASB has proposed new guidance to address the accounting for intangible assets and entity combinations. Both subject areas are growing increasingly important for public sector entities as the financial crisis forces more governments to acquire businesses that would otherwise have been liquidated.

To ensure that these transactions are reported in a consistent and transparent manner, the IPSASB has released for comment the following exposure drafts (EDs):

ED 40, Intangible Assets; and
ED 41, Entity Combinations from Exchange Transactions.
ED 40 proposes an IPSAS that converges with the International Accounting Standards Board's (IASB) International Accounting Standard 38, Intangible Assets. It also incorporates guidance on website costs and intangible heritage assets. Meanwhile, ED 41 is converged with the IASB's International Financial Reporting Standard 3, Business Combinations because it addressed entity combinations that are similar in nature to those in the private sector.

The EDs may be viewed by going to www.ifac.org/EDs. Comments are requested by August 15, 2009 and may be submitted electronically by registering online at www.ifac.org. To register, click on the Login/Register link located in the website's left-hand navigation. Comments are still being accepted by email to This email address is being protected from spam bots, you need Javascript enabled to view it or This email address is being protected from spam bots, you need Javascript enabled to view it .

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4. IPSASB and IMF Continue Strong Partnership

The IPSASB's May 2009 meeting was held at the offices of the International Monetary Fund (IMF) in Washington DC, recognizing the strong participation of IMF observers to the IPSASB's ongoing deliberations.

The IPSASB meeting opened with a speech by Mr. Murilo Portugal, Deputy Managing Director of the IMF. The transcript of this speech is available at:

http://www.imf.org/external/np/speeches/2009/051809a.htm

In addition, two senior officials with IMF provided commentary to the IPSASB on the global financial crisis and its impact on governments.

The IPSASB and the IMF have formed a joint task force to learn about various government interventions in response to the global financial crisis and the application of accounting standards for reporting government actions.

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5. Review Launched into Cash Basis IPSASs

The IPSASB has established a Task Force to undertake a review of the International Public Sector Accounting Standard (IPSAS), Financial Reporting under the Cash Basis of Accounting. The purpose of the review is to determine whether the IPSAS should be modified or if further guidance should be provided by the IPSASB.

As part of the review process, the IPSASB is asking those who have been involved in the adoption of the Cash Basis IPSAS in developing economies to complete a questionnaire on their experiences with respect to implementation issues. Please see the invitation letter for a full explanation of the review process.

The materials are available in English, Spanish, and French and can be downloaded from the IPSASB website at www.ifac.org/PublicSector/Projects.php#InProgress.

Responses are invited by July 15, 2009 from interested parties, including Ministers of Finance and heads of finance departments or their equivalents, users of financial reports, advisors, and other relevant financial management and similar experts, including members of the international and national aid agencies.

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6. IPSASB Releases 2009 ISPAS Handbook; French and Spanish Translations of 2007 Handbook

The IPSASB has published the 2009 Handbook of International Public Sector Accounting Pronouncements.

The updated handbook contains all pronouncements of the IPSASB as of December 31, 2008, as well as the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants. It also includes editorial corrections identified since the publication of the 2008 handbook, and amendments to the Code of Ethics.

The handbook can be downloaded free of charge in PDF format from the IFAC online bookstore (www.ifac.org/store). Print copies are also available for shipment.

The IPSASB has also published French-language and Spanish-language translations of its 2007 Handbook of International Public Sector Accounting Pronouncements.

These editions contain translations of 24 accrual basis IPSASs and the comprehensive cash basis IPSAS. They revise the translation of the 2005 Handbook, with key changes including three additional IPSASs and revised versions of eleven other IPSASs.

The French and Spanish handbooks can be downloaded free of charge in PDF format from the IFAC online bookstore (www.ifac.org/store). Print copies are also available for shipment.

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7. IPSASB 2009 Meeting Dates

In order to meet its strategic goal of International Financial Reporting Standard convergence by December 31, 2009, the IPSASB has added a fourth meeting in 2009 to allow it to finalize the IPSASs based on EDs 36-41 inclusive. Remaining 2009 meeting dates are as follows:

September 8-11 in Toronto, Canada (replacing the October meeting); and
December 8-11 in Rome, Italy.

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8. Share IPSASB eNews with Your Colleagues

1. Go to the eNews sign-up page at http://www.ifac.org/E-news/index.tmpl.
2. Enter your email address, name, and country.
3. Select "Public Sector eNews" from the check list as well as any other eNews alerts that you would like to receive.

You will receive the next issue of the IPSASB eNews directly into your inbox.

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For more information about any of the items mentioned above or other information about the IPSASB, please contact: This email address is being protected from spam bots, you need Javascript enabled to view it or visit the IPSASB's home page at www.ipsasb.org.

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IPSASB Reaffirms its IFRS Convergence Strategy with Emphasis on Financial Instruments

(New York/May 27, 2009) – At its May 18–21 meeting in Washington DC, the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) reaffirmed its commitment to its global convergence program and the development of standards dealing with financial instruments.

The IPSASB confirmed that it will continue its full consultation on exposure drafts (EDs): ED 37, Financial Instruments: Presentation, ED 38, Financial Instruments: Recognition and Measurement, and ED 39, Financial Instruments: Disclosures, while recognizing the intention of the International Accounting Standards Board (IASB) to modify aspects of its current standards relating to the measurement of financial instruments. The IPSASB will consider any changes ultimately adopted by the IASB in due course.

“The IPSASB believes the public sector and its constituents are best served by having International Public Sector Accounting Standards (IPSASs) on financial instruments and removing reliance on the hierarchy at this time. The IPSASB strategy will provide stability for users and allow the IPSASB to manage the current period of uncertainty. The current global financial crisis underlines the importance of consistent financial reporting by governments of their exposures to financial instruments,” states Mike Hathorn, Chair of the IPSASB.

How to Comment

Comments on EDs 37–39 are requested by July 31, 2009. The EDs may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it and This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

IFAC 2008 Annual Report Highlights Initiatives During Credit Crisis and Need for Convergence to Global Standards

(New York/May 26, 2009) – The International Federation of Accountants (IFAC) released its 2008 annual report today, highlighting initiatives to help restore global financial stability and, in addition, describing how some of IFAC’s core work—developing international standards and guidance—became even more relevant in the current economic environment.

“As a result of the crisis, some of the ideas IFAC has been communicating for decades are resonating with greater force,” said Ian Ball, Chief Executive Officer. “Chief among these is the need for convergence to global standards.”

The report features messages from IFAC’s immediate Past President Fermín del Valle, IFAC Chief Executive Officer Ian Ball, and Public Interest Oversight Board Chair Professor Stavros Thomadakis, who commented, “As in past years, IFAC has continued its commitment to the public interest, both in what has been achieved already and in priorities established for the future.” In addition, it includes reports from the chairs of the Consultative Advisory Groups to IFAC’s independent standard-setting boards.

A key feature of the report is its Service Delivery section, which compares IFAC’s planned services with those delivered in five areas:

· Standards and Guidance

· Promoting Quality

· International Collaboration Activities

· Representation of the Accountancy Profession in the Public Interest

· Information Services

“This section of the annual report—which comprehensively describes the services delivered by IFAC in 2008—is critical in demonstrating IFAC’s accountability to its stakeholders,” said Mr. Ball, adding, “For this reason, we have sought and received assurance from our independent auditors about the reliability of this information.”

The annual report describes the actions taken, over the past year, by IFAC and its standard-setting boards in advancing convergence of auditing, ethics, and public sector accounting standards; revising and updating the independence standards of the Code of Ethics for Professional Accountants; establishing a new framework for International Education Standards; and developing new benchmark guidance for professional accountants in business, as well as for small- and medium-sized practices.

The IFAC 2008 annual report can be downloaded from the IFAC website at www.ifac.org/About/2008-annual-report.php. Print copies may be obtained by sending an email with your mailing address to This email address is being protected from spam bots, you need Javascript enabled to view it .

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26 May 2009

In this issue:

IFAC Supports G-20 Objectives for Reform of Global Financial System
2008 Annual Report Available Online
Clarity Project Completed; Clarified ISAs/ISQC 1 Featured on New IAASB Website
New IPSASB Handbook for 2009 Released; 2007 Handbook Translated into Spanish
Agricultural Accounting Addressed in New Exposure Draft
IPSASB Proposes New Requirements on Reporting on Financial Instruments
New Guidance Will Strengthen Reporting of Intangible Assets and Entity Combinations
Quality Control Implementation Guide for SMPs Now Available
New Guidance Focuses on Development of Accounting Technicians
Drafting Conventions to Improve Clarity of IESs Proposed
Noteworthy Articles on PAIBs, Governance, Risk, and Leadership Published
Guidance Issued for Enhancing Corporate Governance
Sustainability Framework Generates Record Web Traffic

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1. IFAC Supports G-20 Objectives for Reform of Global Financial System

IFAC supports the proposals issued by the Group of Twenty (G-20) Finance Ministers and Central Bank Governors during the April 2 summit on the world economic crisis in London.

The G-20 objectives are consistent with many of the recommendations that IFAC sent to the G-20 Working Groups prior to the London meeting. These include a call for implementing the Financial Stability Board's 12 key International Standards and Codes (which include International Standards on Auditing) and strengthening the roles of the International Monetary Fund and the World Bank.

IFAC outlined its recommendations in letters written to three of the G-20 Working Groups, which met at the April 2 summit. The full set of IFAC recommendations can be viewed at www.ifac.org/financial-crisis.

Some of the more significant recommendations include:

The adoption of International Public Sector Accounting Standards (IPSASs) in all jurisdictions;
Strengthening of the International Monetary Fund's Code of Good Practices on Fiscal Transparency through the application of IPSASs;
Support for the establishment of well-governed professional accountancy bodies in countries where they do not currently exist;
Continued support for the World Bank's Reports on Observance of Standards and Codes (ROSC) initiative;
That the G-20 ensure its actions are supportive of the small business sector; and
Establish an international principles-based threshold of competencies for senior financial officers in public interest entities.
IFAC is now developing an additional set of recommendations to build on the proposals described in the G-20 Communiqué issued during the London summit.

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2. 2008 Annual Report Available Online

The IFAC 2008 Annual Report is now available online at www.ifac.org/About/2008-annual-report.php.

The report gives information on IFAC's Service Delivery for 2008, which includes Standards and Guidance, Promoting Quality, International Collaboration Activities, Representation of the Accountancy Profession in the Public Interest, and Information Services.

The IFAC 2008 Annual Report also features messages from past President Fermín del Valle, Chief Executive Officer Ian Ball, and Public Interest Oversight Board Chairman Stavros Thomadakis. This year, reports are also provided from the Consultative Advisory Groups for the International Accounting Education Standards Board, the International Ethics Standards Board for Accountants, and the International Auditing and Assurance Standards Board.

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3. Clarity Project Completed; Clarified ISAs/ISQC 1 Featured on New IAASB Website

The International Auditing and Assurance Standards Board (IAASB) has completed its Clarity Project with the release, in March 2009, of the final seven clarified International Standards on Auditing (ISAs) following the consideration and approval of due process by the Public Interest Oversight Board.

With the Clarity Project's completion, all 36 ISAs and International Standard on Quality Control (ISQC) 1 have been revised in accordance with the IAASB's clarity conventions. These revisions will make the standards clearer and easier to understand, implement and translate. The clarified standards go into effect for audits of financial statements for periods beginning on or after December 15, 2009.

To help in the implementation of the new standards, the IAASB has developed an online Clarity Center (http://web.ifac.org/clarity-center/index). The Center provides a full set of the final standards, marked text showing changes from the original standards, a project history, and commonly asked questions and answers. In addition, the IAASB is developing a set of support modules, which will also be accessible from the Clarity Center, that will feature video and slide presentations highlighting key changes in the standards.

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4. New IPSASB Handbook for 2009 Released; 2007 Handbook Translated into Spanish

The International Public Sector Accounting Standards Board (IPSASB) has published the 2009 Handbook of International Public Sector Accounting Pronouncements.

The updated handbook contains all pronouncements of the IPSASB as of December 31, 2008, as well as the IFAC Code of Ethics for Professional Accountants issued by the IESBA. It also includes editorial corrections identified since the publication of the 2008 handbook and amendments to the Code of Ethics.

The IPSASB has also published a Spanish-language translation of its 2007 Handbook of International Public Sector Accounting Pronouncements.

This edition contains translations of 24 accrual basis IPSASs and the comprehensive cash basis IPSAS. It revises the translation of the 2005 Handbook, with key changes including three additional IPSASs and revised versions of 11 other IPSASs.

Both handbooks can be downloaded free of charge in PDF format from the IFAC online bookstore (www.ifac.org/store). Print copies are also available for shipment.

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5. Agricultural Accounting Addressed in New Exposure Draft

The International Public Sector Accounting Standards Board (IPSASB) has proposed new guidance for the accounting treatment of, and disclosures related to, agricultural activity.

In order to provide clear financial reporting requirements for agricultural activity in the public sector, the board has released for comment the following exposure draft (ED):

ED 36, Agriculture. Comment is requested by June 30, 2009.
This ED is part of the IPSASB's global convergence program, scheduled for completion by December 31, 2009, that will substantially converge International Public Sector Accounting Standards (IPSASs) with International Financial Reporting Standards (IFRSs) approved at December 31, 2008.

In particular, ED 36 proposes an IPSAS that converges with the International Accounting Standards Board's International Accounting Standard 41, Agriculture, with limited changes to ensure consistency with other IPSASs.

Other EDs that are part of the IPSASB's global convergence program include EDs 37-39 (see item 6), which address financial instruments, and EDs 40-41 (see item 7), which provide guidance on intangible assets and entity combinations.

This document, and all of the other EDs, may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it or This email address is being protected from spam bots, you need Javascript enabled to view it .

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6. IPSASB Proposes New Requirements on Reporting of Financial Instruments

The IPSASB has proposed new financial reporting requirements to assist public sector entities in accounting for financial instruments such as derivatives, bonds, and loans. Public sector reporting of these instruments has become important due to the unprecedented scale of government intervention in the financial sector.

These new requirements are contained in three new EDs:

ED 37, Financial Instruments: Presentation. Comment is requested by July 31, 2009;
ED 38, Financial Instruments: Recognition and Measurement. Comment is requested by July 31, 2009; and
ED 39, Financial Instruments: Disclosures. Comment is requested by July 31, 2009.
The three EDs propose IPSASs that converge with the International Accounting Standards Board's standards for financial instruments as at Dec. 31, 2008 with limited changes.

The EDs may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it or This email address is being protected from spam bots, you need Javascript enabled to view it .

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7. New Guidance Will Strengthen Reporting of Intangible Assets and Entity Combinations

To ensure that these transactions are reported in a consistent and transparent manner, the IPSASB has released for comment the following exposure drafts (EDs):

ED 40, Intangible Assets. Comment is requested by Aug. 15, 2009; and
ED 41, Entity Combinations from Exchange Transactions. Comment is requested by Aug. 15, 2009.
ED 40 proposes an IPSAS that converges with the International Accounting Standards Board's (IASB) International Accounting Standard 38, Intangible Assets. It also incorporates guidance on website costs and intangible heritage assets. Meanwhile, ED 41 is converged with the IASBs International Financial Reporting Standard 3, Business Combinations because it addressed entity combinations that are similar in nature to those in the private sector.

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8. Quality Control Implementation Guide for SMPs Now Available

To further help small and medium practices (SMPs) implement international standards, IFAC has published a Guide to Quality Control for Use by Small- and Medium-sized Practices. The guide is designed to help SMPs understand and efficiently apply International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services, as redrafted under the IAASB's Clarity Project.

The guide was developed by CGA-Canada for IFAC's Small and Medium Practices (SMP) Committee, and uses an integrated case study to illustrate how to implement the requirements of ISQC 1. It includes two sample firm policy manuals and key checklists and forms.

It can be downloaded free of charge from IFAC's online bookstore at www.ifac.org/Store/. A Microsoft Word version is available to allow for translation and adaptation by institutes and small firms.

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9. New Guidance Focuses on Development of Accounting Technicians

The Developing Nations Committee has released a new good practice guide entitled, The Education, Training and Development of Accounting Technicians. It is designed to raise awareness of the role and value of accounting technicians in both the public and private sectors.

The guide promotes the importance of having accounting technician-level programs in both developed and developing economies so that individuals have access to education and training. The guide also encourages professional accountancy organizations to support the development of accounting technicians by offering technician programs that lead to certification and membership in the organization.

The guide can be downloaded free of charge from the IFAC online bookstore (www.ifac.org/store). For more information on IFAC's work to support developing nations, visit www.ifac.org/developingnations.

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10. Drafting Conventions to Improve Clarity of IESs Proposed

The International Accounting Education Standards Board (IAESB) has released exposure draft (ED), Explanatory Memorandum on IAESB Drafting Conventions, which outlines a new drafting style designed to improve the clarity of International Education Standards (IESs).

Key elements of this new style include:

Basing the standards on objectives, as opposed to procedural considerations;
Use of the word "shall" to identify requirements that IFAC member bodies are expected to follow;
Eliminating the present tense to describe actions by an IFAC member body, which some had regarded as ambiguous in terms of obligation; and
Structural improvements to enhance the overall readability and understandability of the standards.
Comments on this ED are requested by May 29, 2009. It can be downloaded at www.ifac.org/EDs.

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11. Noteworthy Articles on PAIBs, Governance, Risk, and Leadership Published

IFAC has published the 2008 Articles of Merit, which includes 11 previously published articles that were selected by the Professional Accountants in Business (PAIB) Committee as part of its annual Articles of Merit Award Program for Distinguished Contribution to the roles and domain of professional accountants in business.

The winning article for 2008 is "Black Holes in Accounting" by Ron Lutka. It was first published in the CMA Canada's monthly members' magazine CMA Management. It focuses on the issue of locating and eradicating undesirable activities that negatively impact the performance of an organization. It also provides advice on understanding the root causes of such problems. Other noteworthy articles include "Financial Leadership: What's It All About?" by Jeffrey C. Thomson and "Ignore Strategic Risk at Your Peril" by Gillian Lees.

The 2008 Articles of Merit, together with past issues, can be downloaded free of charge from the IFAC online bookstore (www.ifac.org/store). The 11 articles in the 2008 publication can also be downloaded individually from the IFAC bookstore.

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12. Guidance Issued for Enhancing Corporate Governance

The Professional Accountants in Business (PAIB) Committee has released a new International Good Practice Guidance document, titled Evaluating and Improving Governance in Organizations, to help professional accountants in business enhance governance and improve organizational performance.

The document includes a framework, a series of fundamental principles, supporting guidance, and references on how PAIBs can contribute to evaluating and improving governance in organizations.

The guidance encourages organizations to achieve a balance between conformance with regulations and driving organizational performance. It was designed to complement existing governance codes, such as the OECD Principles of Corporate Governance (2004) issued by the Organization for Economic Co-operation and Development (OECD).

The PAIB Committee has also issued a separate document, Preface to IFAC's International Good Practice Guidance, which sets out the scope, purpose, and due process of the committee's International Good Practice Guidance series.

Both Evaluating and Improving Governance in Organizations and the Preface to IFAC's International Good Practice Guidance can be downloaded free of charge from the PAIB section of the IFAC online bookstore at www.ifac.org/store.

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13. Sustainability Framework Generates Record Web Traffic

The IFAC online Sustainability Framework, developed by the Professional Accountants in Business Committee, has generated nearly 33,000 page views since its launch in February.

The Framework was developed to help professional accountants and their organizations integrate sustainable ways of thinking into all of their business processes.

The web-based tool is designed with four perspectives-business strategy, internal management, financial investors, and other stakeholders-that allow users to easily navigate the sustainability issues, and related resources, most important to their immediate roles.

The Sustainability Framework can be accessed free of charge from the International Center for Professional Accountants in Business section of the IFAC website at www.ifac.org/PAIB.

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REVISED INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS AVAILABLE IN FRENCH

(New York/May 22, 2009) – The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published a French-language translation of its 2007 Handbook of International Public Sector Accounting Pronouncements. This edition contains translations of 24 accrual basis International Public Sector Accounting Standards (IPSASs) and the comprehensive cash basis IPSAS. This translation revises the French edition of the 2005 Handbook of International Public Sector Accounting Pronouncements and will increase the accessibility of the most recent standards. This will further help to enhance the accountability and transparency of governmental financial reporting. Key changes from the previous translation include three additional IPSASs and revised versions of eleven other IPSASs.

IPSASs set out the requirements for financial reporting by governments and other public sector entities other than government business enterprises. The accrual IPSASs are based on International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) to the extent that the requirements in those standards are applicable to the public sector.

“Providing an updated French translation is critical to the IPSASB’s mission to assist public sector entities throughout the world, and, in particular, in the key constituencies of Francophone Europe, Africa, and North America,” states Mike Hathorn, IPSASB Chairman.

The French translation of the IPSASs was undertaken by the IPSASB in conjunction with the International Accounting Standards Committee Foundation, which also prepares translations of IFRSs for the IASB. This will ensure that the English and French versions of the IPSASs converge with the respective English and French versions of the IFRSs, where appropriate.

It is important to note, however, that the English version of the IPSASs is the official authoritative version of the standards. The 2009 Handbook was recently released in English.

The French handbook is available free of charge in an electronic version from the IPSASB section of the IFAC online bookstore (www.ifac.org/store).

IFAC’s International Public Sector Accounting Standards Board Launches Review of Cash Basis Reporting in Developing Countries

(New York/May 11, 2009) – The International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting board within the International Federation of Accountants (IFAC), has appointed a task force to review the International Public Sector Accounting Standard (IPSAS), Financial Reporting under the Cash Basis of Accounting. As part of the review process, it is asking those who have been involved in the adoption of the Cash Basis IPSAS in developing economies—or who have been exposed to the standard—to complete a questionnaire on their experiences, or anticipated experiences, with respect to implementation issues.

The questionnaire, along with an invitation letter that more fully explains the review process, can be downloaded from the IPSASB website at www.ifac.org/PublicSector/Projects.php#InProgress. These materials are available in English, Spanish, and French. Responses are invited by July 15, 2009 from interested parties, including Ministers of Finance and heads of finance departments or their equivalents, users of financial reports, advisors, and other relevant financial management and similar experts, including members of the international and national aid agencies.

According to IPSASB Chair Mike Hathorn, “While the IPSASB promotes the adoption of the accrual basis of accounting, it also recognizes that many governments adopt a form of cash or modified cash basis reporting, and it has a responsibility to support those jurisdictions in strengthening their cash basis financial reports.” The Cash Basis standard, first issued in January 2003, was updated in 2006 and 2007, making the review very timely.

“The primary objective of the review is to identify the major technical issues that governments and other public sector entities in developing economies have encountered, or expect to encounter, in implementing the standard. This will provide input to IPSASB deliberations on whether the standard should be modified and/or if further guidance on its application should be provided,” explains IPSASB Deputy Chair, Erna Swart, who is chairing the task force.

The questionnaire is the first step in the IPSASB task force review process. As a follow up, the task force will undertake more detailed discussions with a range of users, implementers, technical advisors, and others in a number of regions who have responded to the questionnaire.

IFAC’s INternational Public Sector Standards Board proposes new guidance to sTRENGTHEN fINANCIAL rEPORTING BY gOVERNMENTS

(New York/May 7, 2009) – The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is expanding its guidance in two significant areas: accounting for intangible assets and entity combinations. It has published two new exposure drafts (EDS)—ED 40, Intangible Assets and ED 41, Entity Combinations from Exchange Transactions, which propose important new guidance for professional accountants working in government and other public sector entities.

“During the current economic crisis, governments around the world have been acquiring business entities that might otherwise be liquidated. These EDs propose financial reporting requirements that will ensure that these transactions are reported in a consistent and transparent manner, ensuring that governments remain accountable for their actions,” explains IPSASB Chair Mike Hathorn.

The issuance of the exposure drafts is part of the IPSASB's global convergence program that will substantially converge International Public Sector Accounting Standards (IPSASs) with International Financial Reporting Standards (IFRSs) approved at December 31, 2008 The project is scheduled for completion by December 31, 2009.

ED 40 proposes an IPSAS that converges with the International Accounting Standards Board's (IASB) International Accounting Standard 38, Intangible Assets. ED 40 also incorporates guidance on website costs set out in the Interpretation 32 of the IASB’s Standing Interpretations Committee,1 entitled Intangible Assets – Web Site Costs. It also includes guidance on intangible heritage assets.

Because ED 41 addresses entity combinations that are similar in nature to those in the private sector, it is converged with the IASB’s IFRS 3, Business Combinations. Entity combinations that arise from non-exchange transactions are being addressed in a separate public sector-specific project.

The exposure drafts are being issued concurrently because ED 40 addresses issues related to intangible assets acquired in an entity combination arising from an exchange transaction. Both exposure drafts contain limited changes from the relevant IFRS; these changes are mainly to ensure consistency with other IPSASs and to address specific public sector issues.

"Converging IPSASs with IFRSs, where appropriate for the public sector, is one of the key objectives of our standards development program," states Hathorn. "These two exposure drafts propose clear financial reporting requirements for an entity in the public sector in order to ensure that the private and public sectors report similar activities in a consistent fashion."
How to Comment

Comments on EDs 40 and 41 are requested by August 15, 2009. The EDs may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it and This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

IFAC PRESIDENT ROBERT BUNTING SAYS GOVERNMENT BAILOUTS BRING INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS TO THE FOREFRONT

(New York/May 4, 2009) – Speaking at the Higher Education Forum of the National Association of College and University Business Officers (NACUBO) in Miami, FL, on April 26, 2009, Robert L. Bunting, President of the International Federation of Accountants (IFAC), described the enormous changes happening as a result of the global financial crisis and explained why convergence and implementation of international standards is needed to rebuild and sustain the global financial system.

“We are rapidly moving to one world in accounting, auditing, and corporate governance,” emphasized Mr. Bunting, adding, “IFAC is expediting the development of standards and guidance on key issues, such as going concern, fair value, financial instruments, and corporate governance—and other issues that have been raised as a result of the crisis—so accountants worldwide operate on a level playing field.”

He pointed out that government bailouts of the financial and automotive industries are also resulting in calls for greater accountability and transparency on the part of governments, and indicated that governments can achieve this by adopting International Public Sector Accounting Standards (IPSASs). “Convergence to international public sector accounting standards, which has proceeded at a slower pace than convergence to those in the private sector, is now urgent,” Mr. Bunting emphasized. Such standards are used by the United Nations, NATO, IFAC, and the Organization for Economic Cooperation and Development, are supported and promoted by the World Bank, and are already used by many governments around the world.

Mr. Bunting called on university leaders to broaden their curriculum to address the growing need for convergence to international standards: “Teaching only US GAAP (Generally Accepted Accounting Principles) handcuffs students to the US economy. Academic institutions must incorporate International Standards on Auditing, IPSASs, and International Financial Reporting Standards into their accounting curriculum.”

Bunting’s comments on international standards were part of a presentation about the future of the accounting profession and how universities must broaden their view of what students need—and what the world needs—from accountants. To view the slides of his presentation, go to the IFAC Media Center at www.ifac.org/MediaCenter/?q=node/view/643.

IFAC Releases 2009 Handbook of International Standards on Auditing and Quality Control

(New York/April 30, 2009) – The International Federation of Accountants (IFAC) has released the 2009 Handbook of International Standards on Auditing and Quality Control. The handbook can be downloaded free of charge from the IFAC online bookstore (www.ifac.org/store), and print copies can be ordered for shipment in early May.

The handbook brings together all the International Standards on Auditing and the International Standard on Quality Control that have been redrafted by the International Auditing and Assurance Standards Board (IAASB) to improve their clarity. It also includes a Glossary of Terms and the Preface to the International Standards on Quality Control, Auditing, Review, Other Assurance and Related Services. These become effective on December 15, 2009. This handbook replaces Part II of the 2008 Handbook of International Standards on Auditing, Assurance, and Ethics Pronouncements.

Part I of the 2008 Handbook of International Auditing, Assurance, and Ethics Pronouncements will remain in effect during 2009. It contains pronouncements on auditing, review, other assurance, and related services issued by the IAASB as of January 1, 2008. It also includes the IFAC Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants. The pronouncements on auditing in Part I of the 2008 Handbook of International Auditing, Assurance, and Ethics Pronouncements will remain in effect up to December 14, 2009; thereafter, they will be replaced by those contained in the 2009 handbook.

International Public Sector Accounting Standards Board Moves closer to GLOBAL CONVERGENCE OF FINANCIAL REPORTING STANDARDS

(New York/April 23, 2009) – The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is proposing new financial reporting requirements to assist public sector entities in accounting for financial instruments, such as derivatives, bonds, and loans. These proposed requirements are contained in three newly released exposure drafts (EDs): ED 37, Financial Instruments: Presentation, ED 38, Financial Instruments: Recognition and Measurement, and ED 39, Financial Instruments: Disclosures.

“The unprecedented scale of governmental intervention in the financial sector makes it essential that global transparency and accountability is enhanced through consistent financial reporting of their exposures to financial instruments. Approval of these EDs is just the beginning of a process by which the IPSASB will develop guidance that addresses financial instruments for the public sector and, in doing so, to ultimately develop guidance that addresses further public sector-specific issues,” states Mike Hathorn, Chair of the IPSASB.

The EDs propose IPSASs that converge with the International Accounting Standards Board’s standards for financial instruments as at December 31, 2008, with limited changes, representing a significant step in the IPSASB’s global convergence program, scheduled for completion by December 31, 2009. As part of this program, International Public Sector Accounting Standards will substantially converge with International Financial Reporting Standards approved at December 31, 2008, with limited changes to ensure consistency with other IPSASs, while addressing specific public sector issues.

Additional application guidance has been included in each ED on two key public sector issues. These are provision by government of financial guarantees that are given at zero cost or below market price and, secondly, concessionary loans (loans at below market interest rates). Governments have been using financial guarantees, such as guaranteeing bank deposits and low interest rate loans to support private sector businesses during the current economic crisis. Similar arrangements were also used prior to the crisis, often to achieve social objectives, such as to provide housing assistance.

How to Comment

Forum of Firms Focuses on Going Concern

(New York/April 17, 2009) – Over 70 partners and senior executives from 24 international networks of accounting firms recently met in London to share their experiences, industry insights, and current practices at a symposium on Going Concern and Related Audit Considerations. Panels of experts were assembled with the support of the four largest networks to lead discussions on various topics, including companies’ access to funding, financial statement and audit report implications related to going concern, as well as other related audit considerations, such as valuation and impairment, materiality, and internal control implications.

"This event is the second in a developing initiative by the Forum of Firms to collectively share, examine, and evolve current practice in dealing with the many challenges facing auditors and the profession flowing from the current economic situation. It brings together the Forum membership in a unique manner to hear and openly exchange views, including hearing the latest developments from the International Auditing and Assurance Standards Board (IAASB)," states David Maxwell, Chair of both the symposium and the Forum of Firms.

The symposium commenced with a jurisdictional analysis of accounting and auditing standards, followed by a presentation on IAASB perspectives with particular emphasis on the IAASB’s Staff Audit Practice Alert, Audit Considerations in Respect of Going Concern in the Current Economic Environment, issued in January 2009. The symposium then focused on some of the practical auditing considerations being faced by auditors across a broad spectrum of industries. This resulted in discussion from a wide range of perspectives and suggestions of practical guidance to help auditors navigate through today’s economic climate. The importance of carefully considering assumptions associated with client business models, getting a more intimate understanding of financing arrangements, as well as transparency in disclosures were key focus areas.

"The symposiums are designed to disseminate good practice in an area of critical importance in today's environment and to support both Forum members and the broader Forum objective of providing the highest quality audit services," points out David Maxwell.

IFAC President Robert Bunting says time is now to implement global standards AT World Bank Meeting

(New York/April 17, 2009) – Speaking yesterday to staff at the World Bank in Washington, D.C., Robert L. Bunting, President of the International Federation of Accountants (IFAC), said that the global accounting profession, with the support of the World Bank, must move ahead decisively with implementing a single set of high-quality international financial reporting and auditing standards. “Implementation is vital to strengthening global financial systems, especially during this time of economic crisis,” stated Mr. Bunting.

He said that IFAC is committed to working closely with the World Bank and other institutions to deliver assistance efficiently where it can have the greatest impact. He cited two critical areas where the two organizations must build on current synergy:

To establish the appropriate professional accounting infrastructures and legal and regulatory mechanisms in developing and other countries; these are necessary pre-requisites for the effective implementation of standards; and
To urge reforms of public sector financial management systems, encouraging increased government accountability and the adoption of accrual accounting where resources permit.
Mr. Bunting emphasized IFAC support for the extension of work in these areas by the World Bank and the International Monetary Fund.

He also noted that IFAC has called on the G20 to support the World Bank’s Reports on the Observance of Standards and Codes (ROSC) initiative as a tool to assess a country’s financial reporting architecture and measure the future effectiveness of economic reforms resulting from the economic crisis.

In his remarks, Mr. Bunting also pointed out that small- and medium-sized entities (SMEs) and micro-entities require special attention. Some of these entities will be the next Microsofts, Googles, and IKEAs, contributing new jobs, innovation, and wealth to national and international economies if they are allowed to innovate and grow. “SMEs face challenges that are exacerbated in times of economic crisis—the ability to obtain capital and the rising costs of fuel, supplies, and other factors of production,” Mr. Bunting explained. “We must take care not to further exacerbate these challenges through unnecessary and inappropriate re-regulation of the private sector and we must consider the cost-burden of their meeting regulatory and compliance requirements.”

While IFAC—with 158 members in 123 countries and jurisdictions—is known for its work in establishing international standards for auditing, education, ethics, and public sector accounting, Mr. Bunting pointed out that one of its less-recognized roles will increase in importance in the coming years: as a facilitator and driver of the adoption and implementation of high-quality international standards.

“IFAC is committed to providing leadership on implementation issues by encouraging and facilitating collaboration among firms, practitioners, member bodies, regulators, and other stakeholders,” stated Bunting, adding, “To do so effectively, the world must agree on a single set of standards.”

To view Mr. Bunting's full speech, go to the IFAC Media Center at http://www.ifac.org/MediaCenter/?q=node/view/638.

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Please find below the link to the April 2009 issue of the IFAC Global Digest. Beginning this month, in addition to news items from IFAC member bodies and related organizations, the IFAC Global Digest features a new Financial Crisis News and Resources section.

http://membernet.ifac.org/GlobalDigest/2009_04_Global_Digest.php

The following news items are featured in this issue of the Digest:

Financial Crisis News and Resources

1. ACCA Declares that Financial Reform Must Focus on Preventing the Next Crisis

2. ADB Study Reveals that Global Financial Market Lost $50 Trillion

3. Basel Committee Outlines Financial Crisis, Banking Capital Initiatives

4. CICA Releases Further Guidance for Financial Reporting during Economic Crisis

5. CIMA Addresses G20 on Financial Crisis; Issues Report on Mid-Sized Businesses

6. EFRAG Calls for Investigation into Financial Reporting

7. Experts Provide 31 Recommendations to Improve EU Financial Market Supervision

8. FRC Publishes Update on Going Concern for Directors of Small Companies

9. FSA Publishes Turner Review of Global Banking Regulation

10. Group of Twenty Publishes Financial Crisis Plan

11. IASCF Trustees Support IASB’s Comprehensive Approach to Reviewing Standards

12. ICAEW Response to Turner Review Focuses on Principles-Based Regulation

13. Investors’ Working Group Calls for FASB to Resist Political Pressure

14. Islamic Leaders to Promote Sharia Finance in Response to Crisis

15. OECD Calls for Regional Responses to Global Crisis

16. World Bank to Provide Financial Crisis Support to Romania

Additional News from Member and Regional Accountancy Bodies

1. ACCA Calls on Governments to Do More to Help Small Businesses

2. Australian Institute Issues Transparency Guidance for Not-For-Profit Sector

3. CIMA Report: Farmers’ Incomes Threatened by Lack of Understanding of Costs

4. CIPFA Releases Risk Management Toolkit for Public Bodies

5. CPA Australia Publishes Sustainability Report

6. FACPE Approves Adoption of IFRS in Argentina

7. Hong Kong Institute Launches SMP/SME Resource Center

8. IBRACON to Start Work on Translating IFAC Quality Control Guide

9. ICAC to Hold 27th Annual Conference in Georgetown, Guyana

10. ICAEW and CECCAR Sign Agreement

11. Singapore Institute Calls for Formal Accounting Training for Audit Committees

Additional News from International and Other Organizations

1. Basel Committee Increases Membership

2. EFRAG, Standard Setters Issue Discussion Paper on Performance Reporting

3. European Corporate Governance Forum Sets Out Best Practices for Directors Pay

4. IASB Proposes Changes to Derecognition Requirements

5. IFC Joins with Confederation of Indian Industry to Strengthen Governance Training

6. IOSCO Releases Consultation Papers on Short Selling, Hedge Fund Oversight

7. Ireland to Have New Central Banking Commission

8. Mediterranean Regulators Establish Partnership

9. Swiss Financial Market Supervisory Authority Increases its Operations

IPSASB RELEASES 2009 HANDBOOK OF INTERNATIONAL PUBLIC SECTOR ACCOUNTING PRONOUNCEMENTS

(New York/April 15, 2009) – The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published the 2009 Handbook of International Public Sector Accounting Pronouncements. The handbook provides a single source for financial statement preparers to locate all International Public Sector Accounting Standards (IPSASs). These standards are intended to be used to prepare financial statements for national, state, and local governments and their agencies, as well as international public sector bodies, such as the United Nations and the Organisation for Economic Cooperation and Development.

“The IPSASB is making significant progress on its ambitious work program to achieve substantial convergence with International Financial Reporting Standards. We plan to achieve this by the end of 2009,” states Mike Hathorn, IPSASB Chairman. “It is anticipated, therefore, that while changes to the 2009 handbook are minimal, changes to the 2010 handbook will be significant, with new IPSASs planned on financial instruments, intangible assets, entity combinations, and agriculture,” adds Hathorn.

The 2009 IPSASB Handbook contains all pronouncements of the IPSASB as of December 31, 2008, as well as the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants. The Code is applicable to all professional accountants, including those practicing in the public sector. The updated handbook also includes editorial corrections identified since the publication of the 2008 handbook, as well as amendments to the Code of Ethics.

The handbook can be downloaded free of charge in PDF format from the IFAC online bookstore (www.ifac.org/store), and print copies can be ordered now for immediate shipment. Print copies of the handbook are free of charge, except for a US$25.00 shipping cost.

Special Issue on Sustainability

April 9, 2009

In This Issue:

New IFAC Sustainability Framework

IFAC Framework Supports Accountants in Creating Sustainable Value
Using the Framework
The Unique Position of Professional Accountants
Provide Your Comments/Help IFAC Expand These Resources
Recent Developments in Sustainability from Around the Globe

ACCA Projects Promote Sustainability Awareness
CICA Addresses Climate Change Disclosures
Australian Institute Focuses on Carbon Emissions Reporting
FEE Issues First Four Policies on Sustainability
IFAC and Member Bodies Attend HRH The Prince of Wales Accounting for Sustainability Forum
Sustainability Resources from IFAC Member Bodies

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New IFAC Sustainability Framework

1. IFAC Framework Supports Accountants in Creating Sustainable Value

IFAC has launched a Sustainability Framework (web.ifac.org/sustainability-framework/splash), a new web-based tool designed to help professional accountants influence the way organizations integrate sustainability into their objectives, strategies, management, and definitions of success. It is targeted for professional accountants working in commerce, industry, the public sector, and education, as well as the not-for-profit sector.

The Framework has been viewed nearly 7,000 times as of April 9, 2009.

The Framework can be accessed here.

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2. Using the Framework

The IFAC Sustainability Framework is designed to address the subject of sustainability from four perspectives. These perspectives, and their relevant links to good practice, allow professional accountants easy navigation to the sustainability issues that are most important to them. Users will be able to select the examples of good sustainability practice most relevant to their organizations.

Each perspective offers users specially tailored advice and resources:

Business Strategy: Emphasizes the importance of adopting a strategic approach. Sustainable development is made a part of strategic discussions, objectives, goals, and targets. This perspective encourages support by organization leaders as well as the integration of sustainable development governance, accountability arrangements, and risk management.
Internal Management: Focuses on achieving integrated management systems. Discussed are ways to introduce sustainability and environmental accounting as an extension of existing accounting/information systems. Organizations will be able to enhance performance evaluation and measurement, as well as accommodate internal systems to their sustainable development plans. Also included is advice on how to improve energy efficiency, reduce waste, and, consequently, improve the bottom line.
Financial Investors: Concentrates on improving reporting to investors and funders. Advice is given for incorporating environmental and other sustainability issues into financial statements that support an organization's stewardship role. It also encourages broader-based and forward-looking reporting to investors by management commentary in financial reports.
Other Stakeholders: Considers methods for achieving wider transparency. Among the issues addressed is non-financial reporting related to a broader set of stakeholder expectations. Also included is advice on reporting climate change issues and emissions, as well as sustainability assurance, to promote credibility and trust.
For further information on these perspectives, please see the overview.

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3. The Unique Position of Professional Accountants

The professional background and orientation of accountants provide them with the necessary qualities to support their contribution to sustainability-namely, wide business understanding, numeracy, and knowledge of measurement, objectivity, and integrity. Applying these skills to sustainability issues can help organizations embrace sustainable development and to incorporate it into strategic planning, execution, and reporting. The Framework usefully positions professional accountants as key influencers and facilitators of the integration of sustainability in the business model.

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4. Provide Your Comments/Help IFAC Expand These Resources

The web-based Framework will be updated continually. New links and references to good practice will be provided over time. To aid in this development process, IFAC welcomes feedback from professional accountants. For example, input is sought on the way the Framework presents the field of sustainability, as well as the particular role of professional accountants in facilitating and supporting sustainability and sustainable development.

Comments can be sent to Stathis Gould, Senior Technical Manager, PAIB Committee ( This email address is being protected from spam bots, you need Javascript enabled to view it ).

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Recent Developments in Sustainability from Around the Globe

5. ACCA Projects Promote Sustainability Awareness

The Association of Chartered Certified Accountants (ACCA) released a statement urging companies to increase their focus on low carbon economies and water security.

ACCA has also published a paper, titled Recommendations for the Sustainable Age, which declares that the "business as usual" approach to sustainability is no longer an option for companies globally. The paper discusses eight key policy areas involving sustainability, from corporate governance to audit and assurance, and suggests a series of recommendations for businesses, governments, and the accountancy profession to consider.

ACCA also provides users with a web page entitled Sustainability Publications, which features a variety of academic papers on sustainability, touching on subjects such as carbon accounting and environmental liability.

Later in April, ACCA will launch new web pages devoted to climate change, as well as carbon emissions. It will also launch a quarterly climate change newsletter. To learn more, please go to the ACCA website at www.accaglobal.com.

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6. CICA Addresses Climate Change Disclosures

The Canadian Institute of Chartered Accountants (CICA) has published a paper regarding Management Discussion and Analysis of environmental issues. Titled Building a Better MD&A - Climate Change Disclosures, the publication has five sections devoted to climate change disclosure, including an orientation to the business issues of climate change and a discussion on what investors want to know on the issue.

The Canadian Institute also offers a variety of web-based resources related to the subject, including sections devoted to Sustainability Resources and Climate Change.

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7. Australian Institute Focuses on Carbon Emissions Reporting

The Institute of Chartered Accountants in Australia (ICAA) has released a statement declaring that businesses need greater motivation and certainty to participate in government carbon emissions trading schemes.

The Australian Institute has also published a paper titled Broad Based Business Reporting, which discusses methods for expanding financial reporting practices to include information on non-financial topics such as the environment and sustainability.

Also released by the Institute was the paper The Benefits of Assuring Carbon Emissions Disclosures, which outlines the case for a global assurance standard on carbon emissions.

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8. FEE Issues First Four Policies on Sustainability

FEE (Fédération des Experts Comptables Européens) shares its strategy on sustainability in the form of a series of policy statements.

The first four policy statements in this series cover the following topical issues:

The Contribution of the Accountancy Profession
Cost Internalization
Non Financial Information
Multiple Stakeholders: The Essence of Multidisciplinary Teams
FEE will also host, in conjunction with Eurosif (European Social Improvement Forum), a Sustainability Disclosure Roundtable on April 29, 2009, at the European Parliament in Brussels.

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9. IFAC and Member Bodies Attend HRH The Prince of Wales Accounting for Sustainability Forum

More than 200 representatives from the corporate sector, the investment community, the public sector, and other relevant experts gathered in London to attend the December 2008 Forum Event of the Accounting for Sustainability Project sponsored by HRH The Prince of Wales. The attendees, which included representatives of roughly 15 IFAC member bodies together with IFAC Senior Technical Manager Stathis Gould, participated in discussion groups to help identify concrete steps towards better accounting for sustainability as well as discuss current developments in subjects like carbon reporting and valuing sustainability impacts.

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10. Sustainability Resources from IFAC Member Bodies

A. The Chartered Institute of Management Accountants (CIMA)

CIMA has issued a paper, Climate Change Calls for Strategic Change, which outlines a list of actions for boards, management accountants, and wider management teams to consider while incorporating climate change issues into their organization's strategy. The Institute also maintains its own webpage titled Sustainability Publications, which offers links to relevant papers and reports on the subject.

B. Institute of Chartered Accountants in England and Wales (ICAEW)

ICAEW has published Sustainability: The Role of Accountants, a paper which describes eight corporate mechanisms for supporting sustainability. The Institute also operates the ICAEW Corporate Responsibility Resources webpage, which provides guides, research papers, and other key documents, as well as links to webcasts (including a research seminar series).

C. Japanese Institute of Certified Public Accountants (JICPA)

JICPA has released Research Report No.33 Disclosure in Japan of Investor-Oriented Information Concerning Climate-Change Risk: Current Circumstances and Issues, which investigates Japanese corporate disclosure practices relating to climate change risk and discusses the roles accounting and auditing professionals should play in this area going forward. There is also JICPA's environmental accounting and CSR resources webpage, which provides links to articles related to corporate social responsibility.

D. The Chartered Institute of Public Finance and Accountancy (CIPFA)

CIPFA maintains a Sustainability Resources webpage which provides definitions of the concept, a brief history, as well as important factors in this area. CIPFA also offers a series of guides and other documents on the subject, including Sustainability: A Reporting Framework for the Public Services. This publication outlines the subject for public sector leaders and also provides a tool to help them communicate to their stakeholders.

E. New Zealand Institute of Chartered Accountants (NZICA)

NZICA has published Sustainable Development Reporting: an idea whose time has come, a paper which provides an overview of sustainability and how it relates to everyday business decisions, and also describes some current sustainability reporting practices. The New Zealand Institute has also established a Task Force on Sustainable Development Reporting that explores current trends of thought leadership in sustainable development reporting.

A comprehensive listing of sustainability resources (including guidance and articles) offered by IFAC, its member bodies, and other organizations can be found at http://web.ifac.org/sustainability-framework/splash.

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IFAC Supports G20 objectives for reform of global financial system

(New York/April 7, 2009) – The International Federation of Accountants (IFAC) endorses the proposals to enhance global financial regulation and improve the transparency of the international financial system that were issued in the G20 Communiqué on the world economic crisis on April 2 in London.

The G20 objectives are consistent with many of the recommendations that IFAC sent to the G20 Working Groups prior to the London summit, such as the call for implementing the Financial Stability Board’s 12 key International Standards and Codes (which include International Standards on Auditing); making significant progress toward a single set of high-quality global accounting standards; making improvements in the international regulatory framework; and strengthening the roles of the International Monetary Fund and the World Bank. (See IFAC’s submission at www.ifac.org/financial-crisis).

“We support the G20 in building a reformed international financial system,” states Ian Ball, Chief Executive Officer of IFAC. “The accountancy profession will have a vital role to play moving forward, and IFAC will continue to emphasize the measures we suggested in our recommendations to the G20 last week.”

Among IFAC’s recommendations were the adoption of International Public Sector Accounting Standards (IPSASs) in all jurisdictions and the provision by the G20 of sufficient resources to develop and disseminate implementation guidance for the global standards they support. IFAC also proposed:

· Strengthening of the International Monetary Fund’s Code of Good Practices on Fiscal Transparency through the application of IPSASs;

· Support for the establishment of well-governed professional accountancy bodies in countries where they do not currently exist;

· Continued support for the World Bank’s Reports on Observance of Standards and Codes (ROSC) initiative;

· The establishment of an international, principles-based threshold of competencies for senior financial officers in public interest entities; and

· That the G20 ensure its actions are supportive of the small business sector.

IFAC is developing a further set of recommendations that builds on the proposals in the G20 Communiqué

PSASB MOVES CLOSER TO GLOBAL CONVERGENCE OF FINANCIAL REPORTING STANDARDS WITH NEW ED ON AGRICULTURE

(New York/March 31, 2009) – The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published an exposure draft (ED), entitled ED 36, Agriculture. This ED is part of the IPSASB’s global convergence program, scheduled for completion by December 31, 2009, that will substantially converge International Public Sector Accounting Standards (IPSASs) with International Financial Reporting Standards (IFRSs) approved at December 31, 2008. It proposes an IPSAS that converges with the International Accounting Standards Board’s International Accounting Standard 41, Agriculture, with limited changes to ensure consistency with other IPSASs. These changes include an acknowledgement that, in some jurisdictions, biological assets may be sold or transferred for nominal amounts.

“Converging IPSASs with IFRSs, where appropriate for the public sector, is one of the key objectives of our standards development program,” states Mike Hathorn, Chair of the IPSASB. “This exposure draft proposes clear financial reporting requirements for agricultural activity in the public sector in order to ensure that the private and public sectors report similar activities in a consistent fashion.”

How to Comment

Comments on ED 36 are requested by June 30, 2009. The ED may be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it and This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

REVISED INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS AVAILABLE IN SPANISH

(New York/March 27, 2009) – The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has published a Spanish-language translation of its 2007 Handbook of International Public Sector Accounting Pronouncements. This edition contains translations of 24 accrual basis International Public Sector Accounting Standards (IPSASs) and the comprehensive cash basis IPSAS. This translation revises the translation of the 2005 Handbook of International Public Sector Accounting Pronouncements and will increase the accessibility of the most recent standards. This will further help to enhance the accountability and transparency of governmental financial reporting. Key changes from the previous translation include 3 additional IPSASs and revised versions of 11 other IPSASs.

“Providing an updated Spanish translation is critical to the IPSASB’s mission to assist public sector entities throughout the world, and in particular in the key constituency of Latin America,” states Mike Hathorn, IPSASB Chairman.

The Spanish translation of the IPSASs was undertaken by the IPSASB in conjunction with the International Accounting Standards Committee Foundation, which also prepares translations of IFRSs for the IASB. This will ensure that the English and Spanish versions of the IPSASs converge with the respective English and Spanish versions of the IFRSs, where appropriate.

It is important to note, however, that the English version of the IPSASs is the official authoritative version of the standards. The 2009 Handbook was recently released in English.

The Spanish handbook is available free of charge in print and electronic versions from the IPSASB section of the IFAC online bookstore (www.ifac.org/store). For printed copies, shipping charges of US$25 per handbook apply. For express courier service, please contact Yansa Morel at +1 (212) 471-8722.

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AESB Releases 2009 Handbook of International Education Pronouncements

(New York/March 26, 2009) – The International Accounting Education Standards Board (IAESB) of the International Federation of Accountants (IFAC) has released the 2009 edition of its Handbook of International Education Pronouncements. The handbook can be downloaded free of charge in PDF format from the IFAC online bookstore (www.ifac.org/store), and print copies can be ordered now for shipment in early April.

Education Handbook

The 2009 Education Handbook contains the IAESB’s suite of eight International Education Standards (IESs), including the IAESB Framework for International Education Pronouncements and Introduction to International Education Standards, as well as three International Education Practice Statements. The handbook reflects the changes in the IAESB’s terms of reference and due process approved in 2006, an update of the glossary for key definitions introduced since its original publication, and minor editorial corrections. No changes of substance have been made in the framework, introduction, or the IESs.

Print copies of the handbook can be ordered for US$50.00 plus shipping. Discounts are available for students, academics, and individuals living in developing countries, as well as for orders of 10 or more copies.

How to Order

The 2009 Handbook of International Education Pronouncements can be downloaded or ordered from the IFAC online bookstore at www.ifac.org/store. Orders can also be placed by calling IFAC at +1 (212) 471-8722.

About the IAESB and IFAC

The IAESB (www.ifac.org/Education) develops standards and guidance on prequalification education, training, and continuing professional education and development for all members of the accountancy profession. The Public Interest Oversight Board oversees the activities of the IAESB and, as one element of that oversight, establishes the criteria for its due process and working procedures.

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 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. In addition to setting International Education Standards, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.
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New IAESB Exposure Draft Focuses on Clarifying Accounting Education Standards

(New York/March 26, 2009) – The International Accounting Education Standards Board (IAESB) of the International Federation of Accountants (IFAC) approved a new exposure draft (ED) that includes recommendations to help improve the clarity of International Education Standards. Comments on this new ED, Explanatory Memorandum on IAESB Drafting Conventions, are invited by May 29, 2009.

Clarifying Professional Standards

The Explanatory Memorandum on IAESB Drafting Conventions reaffirms the IAESB's belief that the use of clear, concise, consistent, and definitive imperatives are essential to the consistent application of international standards. Key elements of the new drafting style include:

· Basing the standards on objectives, as opposed to procedural considerations;

· Use of the word "shall" to identify requirements that IFAC member bodies are expected to follow;

· Eliminating the present tense to describe actions by an IFAC member body, which some had regarded as ambiguous in terms of obligation; and

· Structural improvements to enhance the overall readability and understandability of the standards.

"International standards that are clear and capable of consistent application should contain no ambiguity about the requirements that an IFAC member body or other interested stakeholder in accounting education must meet," states Mark Allison, chair of the IAESB. "The proposed changes are designed to achieve this goal. This, in turn, will enhance implementation worldwide."

The IAESB has focused its efforts on (1) defining the structure of the Standards, and (2) clarifying the language used to describe the requirements of each IFAC member body. The development of drafting conventions will ensure consistency among IAESB educational pronouncements, as well as consistency with other Boards’ use of drafting conventions wherever possible.

How to Comment

The ED can be viewed by going to www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IAESB Technical Manager at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About the IAESB and IFAC

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

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IFAC President Robert L. Bunting Calls for Convergence of Standards and Resistance to Knee-Jerk Regulation, in Accepting Award at LMU

(New York/March 25, 2009) – Robert L. Bunting, President of the International Federation of Accountants (IFAC), was recognized for his contributions to accounting ethics, governance, and the public interest by the Loyola Marymount University’s (LMU) College of Business Administration in Los Angeles on March 17. In accepting the award from Dr. Lawrence Kalbers of the Center for Accounting Ethics, Governance, and the Public Interest, he offered some views on ways to solve the current worldwide financial crisis and discussed the role that the international accounting community must play in the global recovery.

Featured as a guest of the school’s Distinguished Speaker Series, Mr. Bunting told students, faculty, and members of the general public, “It is important for regulators to resist knee-jerk reactions, scapegoats, and silver bullets as they seek to shift the direction of national regulation in the midst of our current financial crisis.” He emphasized that “regulation must be pragmatic and cost effective” and its cost must not exceed the benefit to the public. In particular, he cautioned regulators about the unintended burdens that regulations can place on small and medium enterprises, which are vital to global economic growth.

Among the subjects Mr. Bunting covered was “fair-value accounting,” which he feels has come under undue criticism for its unreliability in shallow, illiquid markets. He believes that this kind of assessment only deflects attention from the more meaningful aspects of the world’s current financial woes.

He also spoke about the disadvantages of a practice under consideration in some quarters: mandatory audit firm rotation. “While firm rotation might seem to remove any bias that may be attached to past decisions, it makes no sense at all,” he emphasized adding, “In most parts of the world there are not enough choices to allow for this without forcing companies to choose audit firms that have no expertise in their industry.”

He explained that a number of countries have experimented with—and subsequently abandoned—the concept as almost impossible to implement. Yet, it is being considered as a remedy to the Satyam scandal in India. Mr. Bunting pointed out that it would not be a pragmatic solution and would certainly set the country apart from nearly all of its trading partners— and represent a step backwards from the creation of a true global economic community.

“We must resist a retreat back into a national focus, with such manifestations as protectionism, national carve-outs of standards and regulations, and other short-sighted political solutions,” Mr. Bunting warned. He suggested strengthening the Financial Stability Forum, which brings together national bodies of sector-specific regulators, central bankers, and industry supervisors, and the International Federation of Independent Audit Regulators, a newer organization, to deal with the consequences of the increasingly integrated global economy.

Mr. Bunting added, “IFAC has experience in understanding how to make an international organization work, and we are ready and willing to help any groups, especially those who do not have experience in the standard-setting arena.”
To view Mr. Bunting’s full speech, go to the IFAC Media Center at http://www.ifac.org/MediaCenter/.

Robert L. Bunting was elected president of IFAC in November 2008 and has been an IFAC Board member since 2005. He is a past Chairman of the American Institute of Certified Public Accountants.

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18 March 2009

Features

1. IFAC Helps SMPs/SMEs Position for the Long Term

The SMP Committee has started investigating methods for positioning and equipping small and medium practices (SMPs) for success in the long term. Although the financial crisis remains a major concern, the committee and other professional bodies say that SMPs must not lose sight of longer-term strategic issues, such as competition, regulatory complexity, and reduced compliance work.

This subject has been addressed in a number of studies and articles, including:

A. The 2008 American Institute of Certified Public Accountants' (AICPA) PCPS/TSCPA National MAP Survey, at http://pcps.aicpa.org/NR/rdonlyres/43FEE52D-0DA1-445E-AE91-703A76D5BD2B/0/21723782008NationalMAPSurveyCommentary.pdf.
B. The article "Firm of the Future" in Journal of Accountancy, AICPA, at www.journalofaccountancy.com/Issues/2008/Nov/The+Firm+of+the+Future.htm.
C. The report Public Practice: Firm of the Future, published by CPA Australia, at www.cpaaustralia.com.au/cps/rde/xchg/SID-3F57FECA-9AB6E3C4/cpa/hs.xsl/724_23181_ENA_HTML.htm.

The needs of SMPs/SMEs were an important theme of IFAC's 2008 Global Leadership Survey. The survey sought the views of accountancy institute leaders on the credit crisis and other professional issues. Respondents felt that the most important issue for the accountancy profession in 2009 was addressing the needs of SMEs and SMPs. Transitioning to ISAs, a particularly relevant issue for SMPs, was the fourth most important.

A significant portion of the discussions at the February 2009 IFAC Board meeting concentrated on the issues facing SMPs and SMEs. Board members approved a process for exploring how IFAC can best support this important sector of the global economy. A proposal on this topic will be presented to the Board in June. All IFAC members and associates, regional accountancy organizations, firms, and professional accountants will be invited to provide their input.

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2. New IFAC Resources for SMPs/SMEs in Credit Crisis

IFAC has launched a new website section dedicated to the global financial crisis (www.ifac.org/financial-crisis). Recognizing the challenges faced by small and medium practices (SMPs) and small- and medium-sized enterprises (SMEs) in the current economic climate, IFAC has added a new page focused on the needs of this constituency. This new page provides SMPs and SMEs with links to resources, which include articles, speeches, and information on financial crisis initiatives undertaken by IFAC and other organizations.

The page can be accessed at either www.ifac.org/smp/index.php#Resources or www.ifac.org/financial-crisis/smp-sme-resources.php.

In addition, IFACnet (www.ifacnet.com), IFAC's global search engine for the accountancy profession, continues to grow in popularity and functionality. More than 30 IFAC member bodies and other organizations provide content to IFACnet, and that number is growing.

Other news and resources related to SMPs and SMEs can be found at the International Center for SMPs at www.ifac.org/smp.

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3. Share Your Thoughts on Current Issues on SMP/SME Discussion Board

The SMP Committee would like to hear from practitioners worldwide on how your practice is addressing, or is affected by, the credit crisis. Share your views on the SMP/SME Discussion Board. The committee also welcomes your comments on other issues, such as the challenges of coping with the credit crisis, planning for long-term success, and dealing with micro-entity reporting.

To post your views on these and other vital topics, please join the public discussion on the committee's SMP/SME Discussion Board.

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News from IFAC

4. IAASB Finalizes Clarity Project

The International Auditing and Assurance Standards Board (IAASB) has completed the Clarity Project. This landmark achievement will give auditors worldwide access to 36 newly updated International Standards on Auditing (ISAs) and one International Standard on Quality Control (ISQC) that have been reviewed and redrafted in a "clarified" style that will make them easier to understand, translate, and implement. These standards are effective for audits of financial statements for periods beginning on or after December 15, 2009.

The IAASB features these new standards and other resources in a new Clarity Center on the IAASB website (www.ifac.org/IAASB).

The UK's Auditing Practices Board (APB) has already decided to adopt the redrafted standards, effective for audits of financial statements for periods ending on or after December 15, 2010 (refer to the announcement at www.frc.org.uk/apb/press/pub1880.html).

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5. IAASB Issues Audit Practice Alert on Going Concern

To help auditors, management, and those charged with governance address the rapidly growing challenges related to the credit crisis, the staff of the IAASB has released a new practice alert entitled Audit Considerations in Respect of Going Concern in the Current Economic Environment. The alert highlights areas within International Standard on Auditing (ISA) 570, Going Concern, as well as other ISAs, which are particularly relevant in the current economic downturn.

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6. SMP Committee Approves 2009-2012 Strategic and Operational Plan

The SMP Committee recently approved its Strategic and Operational Plan for 2009-2012. The plan includes an increased focus on providing practical support to SMPs in the form of implementation materials and web-based resources.

The plan is accessible through the SMP Committee web page at www.ifac.org/SMP/Committee.php.

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7. PAIB Launches New Sustainability Framework

IFAC's Professional Accountants in Business (PAIB) Committee has launched the IFAC Sustainability Framework, a new web-based tool designed to help professional accountants in business integrate sustainable ways of thinking and working in all business processes of their organizations. Developed with four different perspectives-business strategy, internal management, financial investors, and other stakeholders-the framework provides users with links, good practice guidance, and other global resources.

The framework can be accessed at http://web.ifac.org/sustainability-framework/splash.

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8. Nominations Sought for IFAC 2010 Boards and Committees

IFAC is seeking nominations for members of its boards and committees for 2010, including three chair positions on IFAC's standard-setting boards. Five of the vacant positions have been designated for public members, and may be nominated by IFAC member bodies, by members of the public, or via a self-nomination.

The positions available, requisite qualifications, and the process for submitting nominations are all described in Call for Nominations for IFAC Boards and Committees in 2010. Nominations must be submitted through the online Candidate Information System by April 15, 2009.

The SMP Committee encourages member bodies to make a special effort to source and nominate suitable candidates from SMPs and SMEs to serve on IFAC's boards and committees. For more information on the Nominating Committee and on the nomination process, visit www.ifac.org/NominatingCommittee.

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9. IFAC Releases New Paper on Developments in the Financial Reporting Supply Chain

The IFAC Board has approved for release a report on national initiatives related to improving the financial reporting supply chain. Titled Developments in the Financial Reporting Supply Chain-Results from a Global Study among IFAC Member Bodies, the global research study includes input from 74 IFAC member bodies from 59 different countries and jurisdictions, including all major economies. The study indicates that progress has been made in the areas of governance, financial reporting, and auditing. However, the study also highlighted a number of important issues that still need to be addressed, including the adoption of suitable reporting standards for SMEs and the challenges of SMPs to keep up-to-date with changes in ISAs and other standards.

The report can be downloaded free-of-charge at http://ifac.org/frsc.

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10. SMP Committee Publishes Free Quality Control Guide

The SMP Committee published its second non-authoritative implementation guide, Guide to Quality Control for Use by Small- and Medium-sized Practices (QC Guide). The QC Guide, developed by CGA-Canada, is intended to help SMPs understand and efficiently apply International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services, as redrafted under the IAASB's Clarity Project. The guide comprises: guidance on how to implement the requirements of ISQC 1 in the context of smaller practices (using an integrated case study); two sample firm quality control manuals; and some key checklists and forms.

The guide can be downloaded free-of-charge from IFAC's online bookstore at www.ifac.org/store or via the resources section at the International Center for SMPs at www.ifac.org/smp/index.php#Resources. A version of the document in Microsoft Word is also available.

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11. Work Progressing on New SMP Guides for ISAs and Practice Management

IFAC has started work on updating the Guide to Using International Standards on Auditing in the Audits of Small- and Medium-sized Entities (ISA Guide). Developed by the Canadian Institute of Chartered Accountants, the ISA Guide is designed to help practitioners efficiently apply ISAs to audits of SMEs. The update conforms the ISA Guide to the ISAs newly redrafted due to the Clarity Project, as well as accommodates feedback from users of the first edition. The update is scheduled for release in late 2009.

The current version can be downloaded free-of-charge from IFAC's online bookstore at www.ifac.org/store or via the resources at the International Center for SMPs at www.ifac.org/smp/index.php#Resources.

Work is also progressing on the project to develop the Guide to Practice Management for Use by Small- and Medium-sized Practices (PM Guide). The PM Guide, which is being developed by CPA Australia and partially funded by Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili and CGA-Canada, is intended to help SMPs operate proficiently and profitably. The first edition is scheduled for release in early 2010.

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12. IFAC/FEE Practitioners' Symposium Focuses on Support and Standards

On January 28, the SMP Committee and the SMP/SME Working Party of the Fédération des Experts Comptables Européens (FEE) co-hosted the IFAC/FEE Practitioners' Symposium in Berlin, Germany. The event was supported by German member bodies Wirtschaftspruferkammer (WPK) and the Institut der Wirtschaftsprufer in Deutschland (IDW).

The event was attended by over 70 delegates and featured a presentation by recently appointed IAASB Chairman Arnold Schilder on the Board's redrafted ISAs and other IAASB initiatives of particular relevance to SMPs.

For more information on the event, please go to www.ifac.org/SMP/2009_speeches.php.

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More News from Around the Globe

13. IASB to Release IFRS for Non-Publicly Accountable Entities

The staff of the International Accounting Standards Board (IASB) will submit a ballot draft of the International Financial Reporting Standard for Non-Publicly Accountable Entities (IFRS for NPAEs) early in the second quarter of 2009. The final version of the standard, previously titled IFRS for Private Entities, as well as IFRS for SMEs, is expected to be published late in the second quarter of 2009.

A full summary of the project's progress can be accessed here.

To assist with the standard's implementation, the International Accounting Standards Committee Foundation (IASCF) is developing a comprehensive suite of training materials that can be downloaded free from the IASB website at www.iasb.org/Education/Resources/Training+material.htm.

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14. Debate Grows on Micro-Entity Financial Reporting

The European Commission has put forward a new proposal that would allow Member States to completely abolish financial reporting obligations for the EU's smallest companies. The new rules are designed to alleviate the regulatory burden on micro-entities. The proposal is going before the European Parliament and the Council of Ministers for consideration. The press release and all working papers can be found here.

Some have already responded to the proposal. Both the Institite of Chartered Accounants of Scotland (ICAS) and FEE have expressed doubt on the benefits of the micro-entity proposal. The ICAS comment can be found here, while the FEE comment is available here.

Meanwhile, the SMP Committee's information paper Micro-Entity Financial Reporting: Some Empirical Evidence on the Perspectives of Preparers and Users suggests that the IASB's proposed IFRS for NPAEs would not be suitable for micro-entities.

In addition, the Maltese government has issued its General Accounting Principles for Smaller Entities (GAPSE) in attempt to reduce the regulatory burden for small- and medium-sized enterprises (SMEs).

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15. Share SMP eNews with Your Colleagues

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AASB’s annual REPORT focuses ON the clarity standards as a foundation for global audit quality

(New York/March 16, 2009) – The International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), today issued its 2008 annual report that highlights the culmination of the Clarity Project. With the completion of the Clarity Project, the IAASB has issued all its auditing standards in a form designed to enhance the understanding and implementation of them, as well as to facilitate translation. The annual report also details the IAASB’s strategy and future direction as it continues to promote the adoption of International Standards on Auditing (ISAs) and develops new standards in response to extensive public consultation undertaken during 2007 and 2008 with key stakeholders.

In the report, former Chairman John Kellas describes the significance of the completion of the Clarity Project and outlines the IAASB strategy and work program. Covering the period from 2009-2011, the strategy and work program responds to significant developments in the environment in which audit and other assurance services are performed, and in which standards for such services are set. In addition, a report from David Damant, Chairman of the IAASB Consultative Advisory Group, draws attention to the work of the advisory group in providing advice to the IAASB on its work program, technical projects, and other matters of relevance.

Jim Sylph, Executive Director, Professional Standards, remarked, “Now that the IAASB has completed the Clarity Project, there are a number of initiatives already underway that will grow in importance during 2009, such as the development of an alternative assurance standard for those entities that do not require an audit. In addition, new initiatives that are vital to the successful implementation of the clarified ISAs have been added to the IAASB’s agenda, including the development of a process to assess the effectiveness of our standards.”

Readers of the IAASB annual report are encouraged to visit the new Clarity Center on the IAASB website (http://web.ifac.org/clarity-center/index) for more information on the Clarity Project and the full suite of standards that will come into effect for audits of financial statements for periods beginning on or after December 15, 2009.

About the IAASB and IFAC

The objective of the IAASB, an independent standard-setting board within IFAC, 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 the criteria for its due process and working procedures.

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 122 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 ethics, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

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IFAC publishes Quality Control implementation guide FOR SMPs

(New York/March 9, 2009) – To further help small and medium practices (SMPs) in the implementation of international standards, IFAC has published a Guide to Quality Control for Use by Small- and Medium-sized Practices. This non-authoritative implementation guide is intended to help SMPs understand and efficiently apply International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services, as redrafted under the IAASB’s Clarity Project* (http://web.ifac.org/clarity-center/index).

Developed by CGA-Canada for IFAC’s Small and Medium Practices (SMP) Committee, the guide uses an integrated case study to illustrate how to implement the requirements of ISQC 1, and includes two sample firm policy manuals and key checklists and forms. It can be downloaded free-of-charge from IFAC’s online bookstore at www.ifac.org/Store/. A Microsoft Word version is available to allow for translation and adaptation by institutes and small firms.

Sylvie Voghel, SMP Committee Chair, remarked, “the guide will help SMPs provide high-quality services to their clients and contribute to improving audit quality.”

In December 2007, the committee published IFAC’s first implementation guide, the Guide to International Standards on Auditing for Use in the Audits of Small- and Medium-sized Entities (ISA Guide). Last year, this was IFAC’s second most popular publication and has been translated into over 10 languages. An updated version, to support the redrafted ISAs and accommodate feedback from users of the current edition, is scheduled for release in December 2009.

These guides form part of the SMP Committee’s strategy to provide comprehensive practical support for SMPs, in the form of implementation materials and web-based resources. For more information, visit the International Center for SMPs at www.ifac.org/SMP/, read the committee’s strategy, and keep updated by signing up for the free quarterly SMP eNews

NEW IFAC GUIDANCE FOCUSES ON THE DEVELOPMENT AND TRAINING OF ACCOUNTING TECHNICIANS

(New York/March 6, 2009) – An important means to build capacity in the accountancy profession in developing countries is through the development of accounting technicians. As part of its strategy to develop the accountancy profession worldwide, the International Federation of Accountants' (IFAC) Developing Nations Committee has released a new good practice guide entitled, The Education, Training and Development of Accounting Technicians. The new guide is designed to raise awareness of the role and value of accounting technicians in both the public and private sectors.

“In developing and emerging economies, individuals often do not have the resources to qualify as professional accountants, but there is a strong demand by governments and organizations for skilled individuals to contribute to the financial reporting and decision-making process. The development of accounting technicians is important to fulfilling this gap and setting a pathway for qualified accounting technicians to develop further as professional accountants,” states Ignatius Sehoole, chairman of the Developing Nations Committee.

The guide can be downloaded free-of-charge from the IFAC online bookstore (www.ifac.org/store). For more information on IFAC's work to support developing nations, visit www.ifac.org/developingnations

IAASB COMPLETES CLARITY PROJECT; NEW WEB PAGE FEATURES FULL SUITE OF STANDARDS AND RESOURCES

(New York/March 3, 2009) – The International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), has completed its Clarity Project* with the release of the final seven clarified International Standards on Auditing (ISAs), following the consideration and approval by the Public Interest Oversight Board (PIOB) of due process. As a result of this landmark achievement, auditors worldwide will have access to 36 newly updated and clarified ISAs and a clarified International Standard on Quality Control. The standards are all featured in a new Clarity Center** on the IAASB website (http://www.ifac.org/IAASB/).
With the completion of the Clarity Project, the IAASB has issued all its auditing standards in a form designed to enhance the understanding and implementation of them, as well as to facilitate translation. The clarified standards are effective for audits of financial statements for periods beginning on or after December 15, 2009.
IAASB Chair Arnold Schilder remarked, “The significant accomplishment of bringing the Clarity Project to a close—on schedule—would not have been possible without the dedicated leadership of my predecessor, John Kellas, and the tireless efforts of the IAASB members and technical advisors. We are pleased to now make the full suite of standards available so that our stakeholders can take the necessary steps to ensure these standards are properly implemented in advance of their effective date.”
Titles of the seven final clarified ISAs are as follows:
• ISA 210 (Redrafted), Agreeing the Terms of Audit Engagements;
• ISA 265, Communicating Deficiencies in Internal Control to Those Charged with Governance and Management;
• ISA 402 (Revised and Redrafted), Audit Considerations Relating to an Entity Using a Service Organization;
• ISA 700 (Redrafted), Forming an Opinion and Reporting on Financial Statements;
• ISA 800 (Revised and Redrafted), Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks;
• ISA 805 (Revised and Redrafted), Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement; and
• ISA 810 (Revised and Redrafted), Engagements to Report on Summary Financial Statements.
The Clarity Center of the IAASB website features updated versions of each of the standards, which can be used as the basis for translations. These versions incorporate

conforming amendments to the standards, as well as changes in the approved clarified ISAs as a result of a review for consistency and other matters of clarity agreed upon by the IAASB at its December 2008 meeting. The IAASB also plans to publish the set of clarified ISAs in a handbook, expected to be released in April 2009.
“We anticipate that the completion of the Clarity Project will bring further momentum to the convergence process,” commented Jim Sylph, IFAC Executive Director, Professional Standards, emphasizing, “Implementation is the next priority and firms and others should take action at the earliest opportunity to deal with all the necessary aspects of implementation.” National standard setters, IFAC member bodies, regulators and oversight bodies, and other stakeholders are encouraged to visit the Clarity Center at [insert website] for further information, including frequently asked questions (FAQs) and upcoming video modules.

* Key elements of the Clarity Project drafting conventions include: establishing an objective for the auditor with respect to the subject matter of each standard; clearly distinguishing requirements from guidance on their application; avoiding ambiguity through eliminating the present tense to describe actions by the auditor and using more imperative language where a requirement was intended; and other structural and drafting improvements to enhance the overall readability and understandability of the standards.

**URL will be provided in a press release on March 3, 2009 when the Clarity Center web page goes live.

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FORUM OF FIRMS WELCOMES completion OF IAASB clarity project; ENCOURAGES Firms to focus on implementation issues

(New York/March 3, 2008) – Members of the Forum of Firms are pleased to note the completion of the International Auditing and Assurance Standards Board’s (IAASB) Clarity Project and are encouraging their members to plan now for the timely implementation of the revised International Standards on Auditing (ISAs).

“This is one of the most significant projects in the history of the IAASB. Completion of this project will result in many improvements to the ISAs and significantly advance global convergence of auditing standards,” states Forum of Firms Chair David Maxwell. “We congratulate the Board on its sustained efforts over the past two years to get the project completed on a timely basis.”

The IAASB Clarity Project involves a comprehensive review of all ISAs and International Standards on Quality Control to improve their clarity and thereby their consistent application.

During the process, a number of standards, including those dealing with group audits, related parties, external confirmations, audit of accounting estimates, and the use of experts were also significantly revised in order to enhance audit quality in these key areas.

Thirty-six standards in all were revised or restated. The due process surrounding their development and approval has been reviewed and endorsed by the Public Interest Oversight Board, an independent body established by the international financial regulatory community. All 36 clarified ISAs come into effect for audits of financial statements for periods beginning on or after December 15, 2009.

“We have been encouraging Forum members to consider implementation matters as and when the standards were promulgated so they have sufficient time to update audit methodologies and training programs in advance of the effective date,” emphasizes Nick Fraser, chairman of the International Federation of Accountants Transnational Auditors Committee, the executive arm of the Forum of Firms. “However, there is no doubt that timely adoption of the ISAs by national regulators will also provide significant impetus in promoting the convergence process , and we look forward to seeing rapid progress in this respect.”

The Forum of Firms, formally established in 2002, is an association of international networks of accounting firms. These firms perform audits of financial statements that are or may be used across national borders. The Forum’s goal is to promote consistent and high-quality standards of financial reporting and auditing practices worldwide. Accordingly, its members have committed to maintaining appropriate quality control standards in accordance with International Standards on Quality Control issued by the IAASB, to have policies and methodologies for the conduct of transnational audits that are based on ISAs, and to have policies and methodologies which conform to the IFAC Code of Ethics for Professional Accountants and national codes of ethics.

For additional details on the Forum of Firms, please visit: www.ifac.org/Forum_of_Firms

IFAC PUBLISHES AWARD-WINNING ARTICLES FOR PAIBs; GOVERNANCE, RISK, AND LEADERSHIP ISSUES COVERED

(New York/March 2, 2009) – Financial leadership, measuring board performance, and managing strategic risk are among the topics covered in a new publication, Articles of Merit,released by the International Federation of Accountants (IFAC). This publication includes 11 previously published articles that were selected by IFAC’s Professional Accountants in Business (PAIB) Committee as part of its annual Articles of Merit Award Program for Distinguished Contribution to the Roles and Domain of Professional Accountants in Business.

The winning article for 2008 is “Black Holes in Accounting” by Ron Lutka. First published in CMA Canada’s monthly members’ magazine, CMA Management, the article focuses on how professional accountants may better identify and address areas within their organizations that may be negatively impacting performance. It also aims to assist professional accountants in recognizing and preventing the causes of the problems within these areas.

For the first time in the history of the award program, professional accountants were invited to participate in the selection process. The PAIB Committee took into account these views when selecting the winning articles. Votes were collected through an online public voting process.

Although the articles were originally published before the extent of the financial crisis was fully known, many of the articles promote financial leadership and better practices for professional accountants in business, which are relevant in today’s financial and economic climate. Other articles of merit cover topics and issues that have been highlighted as challenges for improving organizational performance and achieving sustainable growth.

The 2008 Articles of Merit, together with past issues, can be downloaded free-of-charge from the IFAC online bookstore (www.ifac.org/store). The 11 articles in the 2008 publication may also be individually downloaded from the IFAC bookstore.

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PAIB Committee eNews - February 27, 2009
February 27, 2009

In this Issue:

New IFAC Framework Helps Accountants in Creating Sustainable Value
PAIB Documents Serve as Resources for Navigating Financial Crisis
New IFAC Guidance Focuses on Governance and Organization Performance
Cash Flow, Codes of Conduct Addressed in Good Practice Guidance
IFAC Releases New Report on Developments in Financial Reporting Supply Chain
Roger Tabor Appointed New Chair of PAIB Committee
IFAC Publishes Award-Winning PAIB Articles
Next PAIB Meeting to be held April 22-24 in Hong Kong

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1. New IFAC Framework Helps Accountants in Creating Sustainable Value

IFAC has launched its Sustainability Framework, a new web-based tool designed to help professional accountants influence the way organizations integrate sustainability into all elements of their operation, including objectives, strategies, management, and even definitions of success.

The Framework, which is available at the PAIB webpage: http://web.ifac.org/sustainability-framework/splash, is targeted for professional accountants in a wide range of sectors, such as commerce, industry, education, public, and not-for-profit. It promotes the injection of sustainability leadership throughout the full management cycle-from making and executing strategic decisions, to performance reporting to all stakeholders.

The framework was developed with four different perspectives, each of which offer users specially-tailored advice and resources:

Business Strategy: Emphasizes the importance of adopting a strategic approach. Sustainable development is made a part of strategic discussions, objectives, goals, and targets. This fosters support by leadership.
Internal Management: Focuses on achieving integrated management systems. Sustainable development and environmental accounting is integrated into existing accounting/information systems. Advice is included on improving energy efficiency, reducing waste, and improving the bottom line.
Financial Investors: Concentrates on telling the story to investors. Advice is given for incorporating environmental and other sustainability issues into financial statements that support an organization's stewardship role.
Other Stakeholders: Considers methods for achieving wider transparency. Among the issues addressed are non-financial reporting within a broader set of stakeholder expectations, as well as reporting climate change issues and emissions.
The framework now also offers printer-friendly functionality.

Any comments on the framework, including suggestions for its improvement, are welcome and can be sent to Stathis Gould, Senior Technical Manager, PAIB Committee ( This email address is being protected from spam bots, you need Javascript enabled to view it ).

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2. PAIB Documents Serve as Resources for Navigating Financial Crisis

There are a number of PAIB guidance documents that can help professional accountants in business and their organizations navigate the financial crisis.

They include:

Managing Risk to Enhance Stakeholder Value: This guide examines the theme of risk management from both the traditional review of financial risks of a company and the emerging application of risk management to strategy, reputation and people.
Developments in the Financial Reporting Supply Chain-Results from a Global Study among IFAC Member Bodies: This report is part of IFAC's Business Reporting Project, in which IFAC member bodies and associates studied the progress that their respective countries or jurisdictions have made in the areas of governance, financial reporting, and auditing.
International Good Practice Guidance, Evaluating and Improving Governance in Organizations, (See Item 3)
The Roles and Domain of the Professional Accountant in Business: This paper provides a definition of the professional accountant in business and highlights the many roles that professional accountants in business perform, including ensuring that effective risk management processes are in place.
All of these documents can be accessed at IFAC's bookstore at http://www.ifac.org/Store.

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3. New IFAC Guidance Focuses on Governance and Organization Performance

The PAIB Committee has released a new International Good Practice Guidance document titled Evaluating and Improving Governance in Organizations to help professional accountants in business enhance governance and improve organizational performance.

The document includes a framework, a series of fundamental principles, supporting guidance, and references on how PAIBs can contribute to evaluating and improving governance in organizations. It brings together globally recognized and applicable good practice principles on effective governance into an international benchmark for the accountancy profession.

A separate document, Preface to IFAC's International Good Practice Guidance, sets out the scope, purpose, and due process of the committee's International Good Practice Guidance series.

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4. Cash Flow, Codes of Conduct Addressed in Good Practice Guidance

The PAIB Committee has issued two sets of International Good Practice Guidance (IGPG) that help professional accountants improve decision-making and organizational performance.

The first IGPG is Project Appraisal Using Discounted Cash Flow, which supports PAIBs in their efforts to help organizations deliver long-term value by applying good practice in project appraisal and discounted cash flow analysis.

The second is Defining and Developing an Effective Code of Conduct for Organizations, which helps professional accountants and their organizations develop and implement a code of conduct within a values-based culture. Codes of conduct are vital to ensuring effective corporate governance, but they need the support of a value-based culture. To promote such a culture, an organization, among other things, needs to define its values by considering its purpose, accountabilities, authority, obligations, and duties. It also needs to prepare values statements involving a broad group of managers and other employees.

The Project Appraisal IGPG can be accessed at http://www.ifac.org/Store/Details.tmpl?SID=1212769572351669

The Code of Conduct IGPG can be accessed at http://www.ifac.org/Store/Details.tmpl?SID=1181654891629338.

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5. IFAC Releases New Report on Developments in Financial Reporting Supply Chain

The IFAC Board has approved for release a report on national initiatives related to the financial reporting supply chain. Titled Developments in the Financial Reporting Supply Chain: Results from a Global Study among IFAC Member Bodies, the global research study includes input from 74 IFAC member bodies from 59 different countries and jurisdictions, including all major economies.

The study indicates that progress been made in the areas of governance, financial reporting, and auditing. This progress includes the development of new or revised codes and increased convergence of standards.

However, the study also highlighted a number of important issues that still need to be addressed:

Corporate governance: Issues include risk and control systems that are too narrowly focused and insufficient integration of governance into the overarching business model;
Financial reporting: Issues include the adoption of suitable reporting standards for small- and medium-sized entities and other entities, and meeting the challenges of fair value accounting;
Financial auditing: Issues include the challenges of small and medium accountancy practices to keep up-to-date with changes in International Standards on Auditing (ISAs) and other standards, and
The usefulness of financial reports: Issues include insufficient reporting on non-financial indicators, risks, and sustainability performance.
The report can be downloaded free-of-charge at http://www.ifac.org/frsc.

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6. Roger Tabor Appointed New Chair of the PAIB Committee

Roger Tabor was selected by the IFAC Board to the position of Chair, PAIB Committee for 2009. Mr. Tabor brings 22 years of director-level experience in a major public service organization, the Royal Mail in the UK. His roles have included Enterprise System Programme Director, Finance Director of both letters and counters businesses, and Corporate Planning Director for the UK Post Office. Roger is a past President of the Chartered Institute of Public Finance and Accountancy and was nominated to the PAIB Committee by the consortium of the major accountancy professional bodies in the UK and Ireland, the Consultative Committee of Accountancy Bodies.

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7. IFAC Publishes Award-Winning PAIB Articles

IFAC has released a new publication, 2008 Articles of Merit, which includes 11 previously published articles selected by IFAC's Professional Accountants in Business (PAIB) Committee, and readers, as part of its annual Articles of Merit Award Program for Distinguished Contribution to the roles and domain of professional accountants in business. For the first time in the history of the award, judges took into account the views of professional accountants in business in a public voting process when selecting the winner.

The winning article for 2008 is "Black Holes In Accounting" by Ron Lutka. It was first published in the CMA Canada's monthly members' magazine CMA Management. The article is focused on locating, and eradicating, undesirable activities that negatively impact the performance of an organization, as well identifying the root causes of such problematic activities.

The 2008 Articles of Merit, together with past issues, can be downloaded free-of-charge from the IFAC online bookstore (http://www.ifac.org/store). The 11 articles in the 2008 publication can also be downloaded individually from the IFAC bookstore.

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8. Next PAIB Meeting to be held April 22-24 in Hong Kong

Highlights from previous PAIB Committee meetings can be downloaded at http://www.ifac.org/PAIB.

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For more information about any of the items mentioned above or other information about the PAIB Committee, please contact This email address is being protected from spam bots, you need Javascript enabled to view it .

IFAC Convenes Global Accountancy Leaders TO Focus on Credit Crisis, Needs of SMEs, and Improvements in Financial Reporting

(New York/February 24, 2009) – Accountancy leaders from around the world discussed the global financial crisis, the needs of small- and medium-sized enterprises, and the ways in which professional accountants can contribute to rebuilding economic stability at meetings hosted by the International Federation of Accountants (IFAC) last week in New York.

IFAC convened 40 leaders of accountancy institutes and regional accountancy organizations at its annual Member Body Chief Executives Meeting. Participants heard presentations from Svein Andresen, Secretary General of the Financial Stability Forum, and Nicolas Veron, research fellow at Bruegel, a European economic policy research organization, on the causes of the financial crisis and some of the short- and long-term issues to be addressed. Accountancy leaders from developed and developing countries, along with representatives of the firms, discussed how they were addressing the crisis, including their roles in supporting members of the profession on issues such as ethics, fair value accounting, and going concerns, and in contributing thought leadership to the development of new regulations and policies.

“There was broad agreement that now, more than ever, our profession must be unified in our approach to addressing economic issues,” emphasizes IFAC President Robert Bunting. “IFAC is working closely with its member organizations to determine the best way forward in addressing matters related to the crisis.”

“Our independent standard-setting boards, particularly the International Auditing and Assurance Standards Board and the International Public Sector Accounting Standards Board, are expediting their work on standards and guidance that will help accountants employed in public practice and in government to address the issues they face in the current environment,” states IFAC Chief Executive Officer Ian Ball.

At the IFAC Board meeting on February 19th and 20th, Board members also focused on issues related to the global financial and economic crisis, resolving to identify those areas where the profession’s expertise would be most useful and to reach out to organizations addressing issues related to the crisis.

A significant part of the Board discussions concentrated on the issues facing small- and medium-sized practices and small- and medium-sized entities (SMEs). Board members approved a process for exploring how IFAC can best support this important sector of the global economy and a proposal on this topic will be presented to the Board in June. All IFAC members and associates, regional accountancy organizations, firms, and professional accountants will be invited to provide their input.

In addition, the Board approved for release a study on national initiatives related to the financial reporting supply chain. Based on a survey of its member bodies, the new publication, Developments in the Financial Reporting Supply Chain: Results from a Global Study among IFAC Member Bodies, acknowledges that progress has been made, but also reports that greater attention needs to be given to the following: corporate governance; financial reporting and, in particular, the adoption of suitable reporting standards for SMEs; financial auditing; and the usefulness of financial reports.

In other actions, the IFAC Board approved Roger Tabor, a member of the Professional Accountants in Business (PAIB) Committee since 2004, as Chair of the committee. A past president of CIPFA, Mr. Tabor brings 22 years of director-level experience in a major public service organization and a broad range of finance and planning experience to his new role as PAIB Committee Chair.

IFAC BOARD EXTENDS IAN BALL’S APPOINTMENT AS CEO

(New York/February 25, 2009) – The Board of the International Federation of Accountants (IFAC) has extended Ian Ball’s term as Chief Executive Officer until February 2013. Mr. Ball joined IFAC as its Chief Executive in March 2002, having previously served IFAC as Chair of its Public Sector Committee (now International Public Sector Accounting Standards Board) and as a member of its Nominating Committee. Prior to that, Mr. Ball was a Professor of Accounting and Public Policy, an international consultant in public management, an accounting standard setter, and a senior official in the New Zealand Treasury.

“During these challenging financial times, IFAC is pleased to have a seasoned leader who can collaborate effectively with accountancy bodies worldwide, with regulators, with standard setters, and with governments and others in the international community to restore and strengthen the international financial system, while at the same time pursuing our mission and long-term strategies,” comments IFAC President Robert Bunting.

During his tenure at IFAC, Mr. Ball has overseen the implementation of the IFAC Reforms, a series of initiatives designed to strengthen international audit, ethics, and accounting education standard-setting processes to achieve convergence to international standards and to ensure that the international accountancy profession is responsive to the public interest. These reforms included the launch of the Member Body Compliance Program, which requires members and associates to promote, incorporate, and assist in implementing international standards issued by IFAC and by the International Accounting Standards Board, and to meet requirements for quality assurance, investigation, and discipline activities.

In addition, under his leadership, IFAC has expanded its support for developing nations, for small- and medium-sized practices and enterprises, for the International Public Sector Accounting Standards Board, and for professional accountants in business.

IFAC Seeks Nominations for 2010 Board and Committee Members and three Chairs

New York/February 17, 2009) – The International Federation of Accountants (IFAC), the global organization for the accountancy profession, is seeking nominations for members of its boards and committees for 2010, including three chair positions on standard-setting boards. Five positions are designated for public members, who may be nominated by IFAC member bodies, by members of the public, or via a self-nomination. Seven positions are only open to nominations by the Forum of Firms.* Candidates for all other positions may be nominated by IFAC member bodies. Nominations must be submitted before April 15, 2009. All members of IFAC's boards and committees are expected to act in the public interest and must sign a declaration committing to act with integrity and in the public interest in their role within IFAC.

Nominations for Members and Chairs of Boards and Committees

            Nominations can be submitted for the following boards and committees:

IFAC Board;
International Auditing and Assurance Standards Board;
International Accounting Education Standards Board;
International Ethics Standards Board for Accountants (including chair position);
International Public Sector Accounting Standards Board (including chair position);
Compliance Advisory Panel (including chair position);
Developing Nations Committee;
Professional Accountants in Business Committee;
Small and Medium Practices Committee; and
Nominating Committee.
            The IFAC Nominating Committee will review the nominations to determine the best candidate for a specific position. IFAC strives for a geographical, professional, and gender balance on its boards and committees; nominations of candidates from varying backgrounds are therefore encouraged. However, the principle of the “best candidate for the job” is the overriding consideration.

Public Member Nominations

            IFAC is also seeking nominations for one public member position on each of the following boards: the International Auditing and Assurance Standards Board, the International Accounting Education Standards Board, and the International Public Sector Accounting Standards Board. Two public member positions are open on the International Ethics Standards Board for Accountants. Public members must be seen to be independent of any special interests and to clearly represent the wider public interest. Nominees for the public member positions must have an adequate level of knowledge about the work of the respective standard-setting board, although they do not need to have a professional accountancy designation.

Nominations by the Forum of Firms

            A total of seven positions on the standard-setting boards are open to nominations from members of the Forum of Firms: one on the International Auditing and Assurance Standards Board, two on the International Accounting Education Standards Board, and four on the International Ethics Standards Board for Accountants.

How to Submit Nominations

            The Call for Nominations for IFAC Boards and Committees in 2010 describes the positions available and the qualifications required for each position, as well as the process for submitting nominations. It may be viewed on IFAC's website at www.ifac.org/NominatingCommittee/index.php#Process.

            All nominations must be submitted by April 15, 2009 using the online Candidate Information System at http://nominations.ifac.org. For more information about the role and activities of each of IFAC's boards and committees, visit the designated pages on the IFAC website at www.ifac.org.

NEW IFAC Guidance ON CORPORATE Governance ADDRESSES RISKS AND Organizational ACCOUNTABILITY

(New York/February 10, 2009) – As part of its ongoing commitment to support professional accountants in business and their organizations in enhancing governance and in improving organizational performance, the Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has released a new International Good Practice Guidance document entitled Evaluating and Improving Governance in Organizations. The new guidance to professional accountants in business includes a framework, a series of fundamental principles, supporting guidance, and references on how they can contribute to evaluating and improving governance in organizations.

“This International Good Practice Guidance brings together globally recognized and applicable good practice principles on effective governance into an international benchmark for the accountancy profession,” says IFAC Chief Executive Ian Ball. “It will help PAIBs and their organizations to further improve their governance structures and processes – something critical to ensuring an organizations viability and accountability.”

This guidance is designed to complement existing governance codes, such as the OECD Principles of Corporate Governance (2004), issued by the Organisation for Economic Co-operation and Development (OECD), by encouraging organizations to achieve a balance between conformance with rules and regulations and driving organizational performance. It also focuses on how to create sustainable stakeholder value in the form of good products or services, economic profitability, job security, safety, or other social or economical responsibilities.

A separate document, Preface to IFAC's International Good Practice Guidance, sets out the scope, purpose, and due process of the committee's International Good Practice Guidance series to which this guidance paper on governance belongs.

Both Evaluating and Improving Governance in Organizations and the Preface to IFAC's International Good Practice Guidance can be downloaded free-of-charge from the PAIB section of the IFAC online bookstore at http://www.ifac.org/store . The PAIB Committee welcomes all feedback, which can be emailed to This email address is being protected from spam bots, you need Javascript enabled to view it .

NEW IFAC FRAMEWORK SUPPORTS PROFESSIONAL ACCOUNTANTS IN CREATING SUSTAINABLE VALUE

The recognition governments and many organizations have given to sustainability are changing business culture and society. The global challenge is to ensure that organizations' remain profitable at the same time as improving their environmental and social performance. This requires radical changes in the way organizations do business and presents opportunities for professional accountants to take a significant role in helping organizations to focus on the key drivers of long-term success.

The new Sustainability Framework, developed by the Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC), highlights the issues organizations must address to make sustainability an integral part of their business model. For example, it offers guidance on how to inject sustainability leadership into the management cycle, from making and executing strategic decisions to reporting on performance to stakeholders.

Four Perspectives on Sustainability

Designed from four different perspectives - business strategy, internal management, financial investors, and other stakeholders - the web-based Framework allows professional accountants to easily navigate those sustainability issues that are most important to their immediate roles. It will also allow them to select and use those examples of good sustainability practice that are most relevant to their organizations.

The business strategy perspective emphasizes the importance of adopting a strategic approach, so that sustainable development is a part of strategic discussions, objectives, goals, and targets. This will help to integrate sustainable development governance and accountability arrangements, as well as risk management and foster support by leadership.

The internal management perspective focuses on achieving integrated management systems, introducing sustainability, and environmental accounting as an extension of existing accounting/information systems to accommodate organizational plans for sustainable development and enhancing performance evaluation and measurement. This section of the guidance also includes advice on how organizations can relatively simply and quickly improve energy efficiency and reduce waste; this, in turn, can help them improve environmental performance while reducing their costs, all in a relatively short time frame.
The financial investors' perspective is about telling the story to investors. It offers advice on both incorporating environmental and other sustainability issues into financial statements in a way that supports an organization's stewardship role. It also encourages broader-based and forward-looking reporting to investors in financial reporting by management commentary.

The other stakeholders' perspective considers achieving wider transparency with non-financial reporting against a broader set of stakeholder expectations. Such reporting commonly takes the form of separate sustainability or corporate social responsibility reports that may be based on de facto standards, such as those from the Global Reporting Initiative. Included is advice on reporting on climate change issues and emissions in a way that demonstrates the existence of a structured system and approach to managing climate change impact and risks. This perspective also includes sustainability assurance, to help to improve credibility and trust, and might be of interest to those professional accountants in public practice.

Achieving a Balance between Economic, Environmental or Social Issues

The Framework strongly promotes sustainability’s three key elements – economic viability, social responsibility, and environmental responsibility – and the interconnectivity between them. Although trade-offs can occur between these dimensions, generally being socially responsible (towards employees, communities, and other stakeholders), and environmentally responsible, lead to enhanced trust, and therefore makes good business sense. However, social and environmental responsibility cannot stand in isolation from economic viability. Profitability creates jobs and wealth, and this depends on delivering products and services that people want. A sustainable business creates profitability in a sustainable way that enables organizations to survive and to create a better world.

Enhancing the role of professional accountants in developing sustainable business can benefit their employers and the public interest. Accountants' professional background and orientation equip them with the necessary qualities to support their contribution - namely, wide business understanding, numeracy and knowledge of measurement, and objectivity and integrity. Applying these skills to sustainability issues can help organizations to embrace sustainable development, and to incorporate it into strategic planning, execution and reporting.

How to Access the Sustainability Framework

The web-based Framework, which can be accessed from the Professional Accountants in Business section of the IFAC website (www.ifac.org/paib ), will be subject to ongoing review and development and new links and references to good practice will be provided over time. To help the development process, IFAC welcomes feedback from professional accountants and others on the way the Framework presents the field of sustainability, and the particular role of professional accountants in facilitating and supporting sustainability and sustainable development. Comments can be sent to Stathis Gould, Senior Technical Manager, PAIB Committee ( This email address is being protected from spam bots, you need Javascript enabled to view it ).
IFAC's PAIB Committee develops good practice guidance, provides resources and facilitates the exchange of knowledge and best practices among the more than one million professional accountants worldwide employed in commerce, industry, the public sector, education, and the not-for-profit sector.

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NEW IFAC SUSTAINABILITY FRAMEWORK SUPPORTS ORGANIZATIONS IN IMPROVING PRODUCTS, LOWERING COSTS AND RAISING GOOD WILL

(New York/February 6, 2009) – The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) has developed a comprehensive Sustainability Framework to support professional accountants and their organizations in integrating a sustainable way of thinking and working in all business processes. The Framework illustrates how a commitment to sustainability can help to further improve an organization’s products or services, motivate its people, lower its costs and enhance its reputation.
Designed from four different perspectives - business strategy, internal management, financial investors, and other stakeholders - the new Framework challenges conventional ways of thinking about economic, social and environmental achievements. It also promotes the injection of sustainability leadership into the full management cycle, from making and executing strategic decisions to reporting on performance to all stakeholders.
Roger Adams, chair of the PAIB Committee’s Sustainability Framework Project, highlights the holistic view of sustainability taken by the Framework: “It recognizes the importance of the three main dimensions of sustainability: economic viability, social responsibility, and environmental responsibility, as well as their interconnectivity. We hope that this Sustainability Framework provides the means and motivation for professional accountants to address sustainability issues with greater vigor.”
“Although the accounting sector itself might be considered a relatively low-impact sector in terms of direct environmental and social impacts, it is the accountant’s involvement in the twin issues of organizational decision-making and external reporting that imposes on the accountancy profession the responsibility for understanding, absorbing and articulating the implications of the sustainable development debate," emphasizes Mr. Adams.
IFAC’s Sustainability Framework is a web-based tool that allows users to easily navigate those sustainability issues that are most important to their immediate roles and to select and use those examples of good sustainability practice that can work in their organizations.
The Sustainability Framework can be accessed free-of-charge on the International Center for Professional Accountants in Business section of the IFAC website at: www.ifac.org/PAIB.

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THE IFAC SUSTAINABILITY FRAMEWORK OVERVIEW
The recognition governments and many organizations have given to sustainability and sustainable developments are changing business culture and society. The global challenge is to ensure that organizations' sustainable development practices (a) reverse the previous erosion of natural resources, and (b) improve their environmental, social, and economic performance. This requires radical changes in the way we do business and the way we live our lives. Although many organizations aspire to being responsible, few could claim to be truly sustainable.
This web-based tool targets professional accountants working in commerce, industry, the public sector, education, and the not-for-profit sector who the International Federation of Accountants strongly believes can influence the way organizations integrate sustainability into their objectives, strategies, management, and definitions of success. Professional accountants in all types of organization have a significant role in:
•   Challenging conventional assumptions of doing business;
•   Redefining success;
•   Establishing appropriate performance targets;
•   Encouraging and rewarding the right behaviors; and
•   Ensuring that information flows to support decisions and to monitor and report performance go beyond the traditional ways of thinking about economic success. Being sustainable requires an organization to take full account of its impact on the planet and its people.
The role of professional accountants has therefore expanded beyond that of preparers or assurers of financial and sustainability reports. Professional accountants need to adapt to a world in which sustainability is the key to long-term business performance, and need to understand how, in their diverse roles in organizations, they play a significant role. Sustainability has many connotations, depending on an individual's viewpoint. It means much more to organizations than better reporting on environmental, social, or economic performance. In clearly defining the different facets of sustainability, the IFAC Sustainability Framework can help professional accountants grasp all the important aspects of sustainability that they may encounter, directly or indirectly, and that will be important to their organizations.
Sustainability has three important dimensions for all organizations: (a) economic viability, (b) social responsibility, and (c) environmental responsibility. Although trade-offs can occur between these dimensions, generally being socially responsible (towards employees, communities, and other stakeholders), and environmentally responsible, lead to enhanced trust, and, therefore, makes good business sense. Social and environmental responsibility cannot, however, stand in isolation from economic viability. Profitability and growth create jobs and wealth; organizations must therefore continue to provide products and services that people want. While pursuing a commercial imperative, organizations must also deal with social and environmental issues as part of ensuring that they generate added value for an organization and its stakeholders.
Understanding the sustainability landscape is the first step in being able to demonstrate how to use this greater awareness to benefit their employers and the public interest. Accountants' professional background and orientation equip them with the necessary qualities to support their contribution - namely, wide business understanding, numeracy and knowledge of measurement, and objectivity and integrity. Applying these competences to sustainability issues can help organizations to embrace sustainable development and to incorporate it into strategic planning and execution. This will allow organizations to simultaneously deliver improved business performance and to contribute to a better world.

Using the Framework

The IFAC Sustainability Framework consolidates all of the important aspects of sustainability for organizations wishing to deliver long-term sustainable value to their stakeholders.
So many information sources cover various aspects of sustainability and sustainable development that it has created information overload. Accountants therefore find it very difficult to get a coherent view of all the various perspectives of this topic that organizations embracing sustainable development must understand.
The Framework addresses four perspectives in bringing together all the critical areas required to successfully manage a sustainable organization. These perspectives are: business strategy, internal management, financial investors, and other stakeholders. Organizations that have successfully embraced sustainable development to add value to the organization and its stakeholders have usually taken action from all four perspectives.
Different groups of professional accountants might have more interest in specific areas of the Framework. For example, professional accountants working at senior management levels might be more focused on the business strategy perspective, although all accountants should understand that the success of all other activities depends on action and performance at a strategic level. Professional accountants working in performance management-related roles (including planning, budgeting, performance measurement, and roles such as business/financial analyst) may direct their attention to the internal management perspective, and those preparing business and financial reports might find the investors' and wider stakeholder perspectives of most use.
The Framework provides many examples of good practice, so that professional accountants can easily seek more detailed information on areas of particular interest. These are mostly hyperlinked and will be updated over time.
The four perspectives are summarized below:

Part A: Business strategy perspective - Taking a strategic approach
The Framework emphasizes the importance of adopting a strategic approach, so that sustainable development is a part of strategic discussions, objectives, goals, and targets, and is integrated with governance and accountability arrangements and risk management. Ensuring that sustainable development is featured at a strategic level, supported by leadership and envisioning, is the only way to ensure its integration into all parts of the operational plan-do-check-act management cycle. Only by taking a business strategy approach can organizations make sustainable development a part of doing business as opposed to an add-on luxury that encourages rhetoric rather than sustainable business models and practices.

Part B: Internal management perspective - Making it happen
The internal management part of the Framework focuses on all those areas covering performance and change management that help an organization to deliver on its strategy and specific sustainable development objectives and targets. In many organizations, (a) enhancing performance evaluation and measurement, (b) changing behaviors, and (c) introducing sustainability and environmental accounting as an extension of existing accounting/information systems to accommodate organizational plans for sustainable development, can be a challenge for organizations, and can take time to achieve. Therefore, this perspective also includes advice on how organizations can achieve relatively simple quick wins to improve energy efficiency and reduce waste, that can help them improve environmental performance while reducing their costs, all in a relatively short time frame.

Part C: Financial investors’ perspective - Telling the story to investors
Organizations that are well developed in the internal management perspective are usually in the best position to deliver high-quality information about their sustainability and corporate responsibility performance to investors. The Framework offers advice on both incorporating environmental and other sustainability issues into financial statements in a way that supports an organization's stewardship role and enhanced reporting to investors in financial reporting, including narrative reporting using management commentary.

Part D: Other stakeholders' perspective - Wider transparency
The final perspective considers an evolving part of sustainable development that builds on the development of stakeholder relationships (covered in the business strategy perspective) to improve transparency and non-financial reporting against a broader set of expectations. Such reporting commonly takes the form of separate sustainability or corporate social responsibility reports that may be based on de facto standards, such as those from the Global Reporting Initiative. This perspective also includes sustainability assurance, to help to improve credibility and trust, and might be of interest to those professional accountants in public practice.
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IFAC eNews-January 29, 2009

Thank you for signing up to receive eNews from the International Federation of Accountants. We welcome your comments.

In this issue:

IFAC Launches Financial Crisis Web Page
IAASB Issues Audit Practice Alert on Going Concern
IAASB Nears Finalization of Clarity Project with Issuance of Eight Standards
New IFAC Paper Explains International Standard-Setting Process
IAESB Proposes New Framework to Enhance Clarity and Relevancy of Standards
Consultative Advisory Groups to IAASB and IESBA Host Seminar in Dubai
IFAC Council Approves 2009-2012 Strategic Plan
IFAC Studies Developments in Public Sector Performance Measurement
Global Accountancy Leaders Address Credit Crisis; Focus on Needs of Small Business
IFACnet Search Engine Valuable Resource for 80,000 Individuals
IFAC Names Seven New Members, Three New Associates

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1. IFAC Launches Financial Crisis Web Page

To help professional accountants address issues related to the global financial crisis, the International Federation of Accountants (IFAC) has launched a web page that serves as an international clearinghouse of programs, articles, speeches and other initiatives undertaken by IFAC, its independent standard-setting boards, members, associates and other organizations whose work is relevant to professional accountants both in public practice and in business. IFAC is in the process of developing a new section within the web page devoted to issues related to Small and Medium-Sized Practices (SMPs).

IFAC's Global Financial Crisis web page can be accessed at http://www.ifac.org/financial-crisis.

If your organization has materials dedicated to the financial crisis that you would like to appear on this web page, please send a link and description to This email address is being protected from spam bots, you need Javascript enabled to view it .

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2. IAASB Issues Audit Practice Alert on Going Concern

The unexpected severity, speed and consequences of the credit crisis present unique challenges for management and auditors in meeting their responsibilities in assessing an entity's ability to continue as a going concern. To help auditors and management, as well as those charged with governance, in addressing those challenges, the staff of the International Auditing and Assurance Standards Board (IAASB) has released a new practice alert entitled Audit Considerations in Respect of Going Concern in the Current Economic Environment. The alert highlights areas within International Standard on Auditing (ISA) 570, Going Concern, as well as other ISAs, which are particularly relevant in the current economic crisis.

This is the second audit practice alert issued by IAASB staff. The first, Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment, was issued in October 2008 to help auditors address the challenges of auditing fair value accounting estimates and highlights areas within the ISAs that are particularly relevant in times of market uncertainty.

Both alerts may be downloaded free-of-charge from the IFAC website: http://www.ifac.org/.

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3. IAASB Nears Finalization of Clarity Project with Issuance of Eight Standards

The International Auditing and Assurance Standards Board (IAASB) moved closer to the completion of its Clarity Project with the release of seven clarified International Standards on Auditing (ISAs) and one clarified International Standard on Quality Control (ISQC), following the consideration and approval by the Public Interest Oversight Board (PIOB) of the due process. To date, the IAASB has released 29 final redrafted ISAs and one final redrafted ISQC in the new clarity style.

The titles of the newly issued standards are as follows:

International Standard on Quality Control (ISQC) 1 (Redrafted), Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements
ISA 220 (Redrafted), Quality Control for an Audit of Financial Statements
ISA 500 (Redrafted), Audit Evidence
ISA 501 (Redrafted), Audit Evidence-Specific Considerations for Selected Items
ISA 505 (Revised and Redrafted), External Confirmations
ISA 520 (Redrafted), Analytical Procedures
ISA 620 (Redrafted), Using the Work of an Auditor's Expert
ISA 710 (Redrafted), Comparative Information-Corresponding Figures and Comparative Financial Statements
The complete set of clarified ISAs will be effective for audits of financial statements for periods beginning on or after December 15, 2009. The ISAs can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/Store. The IAASB also plans to publish the set of clarified ISAs in a handbook, expected to be released in April 2009.

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4. New IFAC Paper Explains International Standard-Setting Process

IFAC has released a policy paper that describes 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. It also 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.

The paper may be downloaded from the IFAC website by going to http://www.ifac.org/Store/.

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5. IAESB Proposes New Framework to Enhance Clarity and Relevancy of Standards

The International Accounting Education Standards Board (IAESB) has undertaken a new initiative to enhance the relevancy, clarity and consistency of its standards as well as their applicability to IFAC members and associates. It is proposing a revised Framework for International Education Standards, which sets out the concepts that underlie the IAESB's International Education Standards.

The proposed framework consists of two parts:

Part One explains the educational concepts of competence, initial professional development, continuing professional development, and measurement of the effectiveness of learning and development, which will be used by the IAESB when developing the IESs; and
Part Two describes the nature of the IESs as well as the related IAESB pronouncements and IFAC member body obligations.
Comments on the exposure draft (ED) of the proposed revised framework are requested by April 30, 2009. The ED can be viewed by going to http://www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it .

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6. Consultative Advisory Groups to IAASB and IESBA Host Seminar in Dubai

On March 12, 2009, the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA), along with their respective Consultative Advisory Groups (CAGs), will host a seminar on the global credit crisis in cooperation with the Dubai International Financial Centre.

The seminar will address how the global profession is addressing some issues related to the global credit crisis and highlight recent developments in international standard-setting in the areas of audit, assurance and ethics. Professional accountants working in public practice, business, the public sector, or academia are invited to attend.

The program will include presentations on oversight in the public interest and the importance of international convergence. It will also feature a panel discussion with CAG representatives addressing fair value accounting in the current crisis, ethics and corporate governance.

For registration information, please contact Kathleen Healy, IAASB Technical Manager, at This email address is being protected from spam bots, you need Javascript enabled to view it .

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7. IFAC Council Approves 2009-2012 Strategic Plan

The IFAC Council approved an updated Strategic Plan for 2009-2012 during its November 11-14, 2008 meeting in Rome. The new plan calls for a greater focus on the implementation of international standards, on enhancing the relevance and sustainability of the profession, and on communicating more vigorously on issues such as regulation, financial management, financial reporting and corporate governance.

The plan identifies four key strategic themes for IFAC:

Be recognized as the international standard setter in the areas of auditing and assurance, education, ethics and governmental financial reporting.
Actively support the adoption of, and assist in, the implementation of international standards.
Continually enhance the relevance of the profession.
Be an influential voice for the global accountancy profession.
To view the IFAC Strategic Plan for 2009-2012 go to http://web.ifac.org/download/Strategic_Plan_2009-2012.pdf.

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8. IFAC Studies Developments in Public Sector Performance Measurement

To help professional accountants better plan, execute and control service delivery in their organizations, IFAC's Professional Accountants in Business (PAIB) Committee has conducted a survey on the development of financial and non-financial measurement 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, evaluate and further improve their own performance measurement structures.

The full report can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/Store.

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9. Global Accountancy Leaders Address Credit Crisis; Focus on Needs of Small Business

IFAC has released the results of its 2008 Global Leadership Survey, which sought, the views of accountancy institute leaders on the current credit crisis and other professional issues. Chief executives and presidents of 110 accountancy organizations responded to the survey. According to respondents, the credit crisis has created an increased awareness of the value of professional accountants, and the services that they provide. Institute leaders also reported an increase in the need for services related in some way to the crisis, such as corporate recovery and insolvency services.

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.
The full summary of the results of the 2008 Global Leadership Survey can be accessed at: http://web.ifac.org/download/2008_IFAC_Global_Leadership_Survey.pdf.

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10. IFACnet Search Engine Valuable Resource for 80,000 Individuals

Several years ago, IFAC launched a global search engine for the accountancy profession entitled "IFACnet." Last year, alone, more than 80,000 people from over 200 countries accessed over 20,000 different documents. Popular search terms include auditing and assurance, corporate governance, fair value accounting, sustainability and International Financial Reporting Standards. IFACnet content is provided by IFAC member bodies from around the world, in addition to groups such as the Public Interest Oversight Board, the International Association of Accounting Education and Research, and the Fdration des Experts-Comptables Europens. You may access this search engine on the IFAC home page (www.ifacnet.com) or though more than 150 other websites.

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11. IFAC Names Seven New Members, Three New Associates

During its Rome meeting, the IFAC Council voted to approve seven existing associates as members and three organizations as new associates.

The seven organizations approved to full-membership are:

The Albanian Institute of Authorized Chartered Auditors (IEKA);
The Chamber of Auditors of Azerbaijan Republic (CAAR);
The Lithuanian Chamber of Auditors (LCA);
The Institute of Chartered Accountants of Nepal (ICAN);
The Chamber of Financial Auditors of Romania (CFAR);
The Russian Collegium of Auditors (RCA), and
The Ukrainian Federation of Professional Accountants and Auditors (UFPAA).
The three organizations approved to associate membership are:

The Kampuchea Institute of Certified Public Accountants (KICPAA);
The Ukrainian Association of Certified Accountants and Auditors (UACAA), and
The Institute of Financial Accountants (IFA) of the United Kingdom.
Currently, IFAC is comprised of 137 members and 20 associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce.

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IFAC's Accounting Education Standards Board Proposes new Framework to enhance clarity and relevancy of Standards

(New York/January 27, 2009) – The International Accounting Education Standards Board (IAESB), an independent standard-setting board within the International Federation of Accountants (IFAC), has undertaken a new initiative to enhance the relevancy, clarity and consistency of its standards as well as their applicability to IFAC members and associates. It is proposing a revised Framework for International Education Standards, which sets out the concepts that underlie the IAESB’s International Education Standards.

The proposed framework consists of two parts:

· Part One explains the educational concepts of competence, initial professional development, continuing professional development, and measurement of the effectiveness of learning and development, which will be used by the IAESB when developing the IESs; and

· Part Two describes the nature of the IESs as well as the related IAESB pronouncements and IFAC member body obligations.

The framework is targeted primarily to IFAC member bodies that have direct or indirect responsibility for the learning and development of their members and students. It is, however, also relevant to a wide range of stakeholders, including accounting faculties at universities, employers of professional accountants, professional accountants, prospective professional accountants, and others interested in the work of the IAESB.

"Our objective with this framework is to improve the understanding and application of the principles and concepts that underlie the International Education Standards,” states IAESB Chair Mark Allison. “The framework will also enable the IAESB to deploy a more efficient and effective standard-setting process and to better demonstrate accountability for its decisions.”

How to Comment

Comments on the exposure draft (ED) of the proposed revised framework are requested by April 30, 2009. The ED can be viewed by going to http://www.ifac.org/EDs . Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IAESB Technical Manager at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About the IAESB and IFAC

The IAESB (http://www.ifac.org/Education ) develops standards and guidance on prequalification education, training, and continuing professional education and development for all members of the accountancy profession. The Public Interest Oversight Board oversees the activities of the IAESB and, as one element of that oversight, establishes the criteria for its due process and working procedures.

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 157 members and associates in 122 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting International Education Standards, IFAC’s independent standard-setting boards set standards on ethics, auditing and assurance, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

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For Redrafted International Standard on Auditing ISA 220, Quality Control for an Audit of Financial Statements please download here .

For Redrafted International Standard on Quality Control ISQC 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements please download here.

Dear IFAC Members, Associates, and Regional Accountancy Organizations

Please find below the link to the December 2008 issue of the IFAC Global Digest, which features news items obtained from the websites of IFAC member bodies and related organizations.

http://intranet.ifac.org/GlobalDigest/2008_12_Global_Digest.php

The following news items are featured in this issue of the Digest:

Member and Regional Accountancy Bodies

1. IFAC Launches Financial Crisis Web Page; Requests Articles and Links

2. AICPA Launches Series of Credit Crisis Initiatives

3. ACCA Starts Debate on Going Concern Concept; Publishes Crisis Policy Paper

4. Chartered Accountants in Australia Develop Crisis Website and Other Resources

5. CICA Releases Financial Crisis Guidebook, Reporting Alert for Business Leaders

6. CIMA Addresses Liquidity Questions with Crisis Survival Guide

7. Irish Society Conducts Crisis Survey

8. Scottish Institute Urges Focus on Business Confidence

9. French Accounting Body Provides Updates on Crisis Efforts of Past IFAC President

10. Malta Institute Publishes Crisis Analysis

11. Italy Body Devotes Magazine to the Credit Crisis

12. NIVRA Constructs Credit Crisis Database

International and Other Organizations

1. Basel Committee Issues Fair Value Guidance, Crisis Strategy, Audit Report

2. European Commission Reveals Crisis Recovery Plan, Voices Support for IASB

3. FAF Presses Political Leaders to Preserve Standard-Setting Independence

4. FRC Addresses Credit Crisis Challenges for Directors

5. French Regulators Issue Recommendation for Fair Value

6. G20 Publishes Crisis Report, Outlines Reform Plans

7. ICGN Opposes "Political Interference" in Accounting Standard-Setting

8. IOSCO Committee Launches Crisis Task Forces

9. Professional Leaders Discuss Crisis at IASB-FASB Roundtables

10. SEC Completes Roundtable Discussions on Mark-to-Market

Please feel free to circulate the Global Digest to other individuals within your organization who might be interested.

Sincerely,

Helene

Helene Kennedy
Chief Communications Officer
International Federation of Accountants
545 Fifth Avenue, 14th Floor
New York, NY 10017, USA

Direct: +1(212) 471.8707
Main: +1(212) 286.9344
Fax: +1(212) 286.9570

If an addressing or transmission error has misdirected this e-mail to other than the intended recipient, please notify the author by replying to this e-mail. If you are not the intended recipient you must not use, disclose, print or rely on the information contained in this e-mail.

IFAC may monitor outgoing and incoming e-mails and other telecommunications on its e-mail and telecommunications systems. By replying to this e-mail you give your consent to such monitoring.

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The International Accounting Standards Committee (IASC) Foundation today announced the release of the near final version of the IFRS Taxonomy 2009 for public comment.

The IFRS Taxonomy 2009 is a translation of International Financial Reporting Standards (IFRSs) as issued at 31 December 2008 into XBRL (eXtensible Business Reporting Language), a language that is used to communicate information between businesses and other users of financial information.

The specific characteristics of XBRL allow companies, regulators, investors, analysts and others using the IFRS Taxonomy 2009 with easier filing, access to and comparison of financial data.

XBRL is rapidly becoming the format of choice for the electronic filing of financial information - particularly within jurisdictions reporting under IFRSs. In addition, on 4 March 2008 the recent US SEC rule that allows non-US companies listed in the US to file their financial reports according to IFRSs as issued by the International Accounting Standards Board (IASB) became effective. According to this rule non-US companies that choose to submit their financial reports in IFRS electronically will have to do so using the IFRS Taxonomy 2009.

The IFRS Taxonomy 2009 builds upon the architecture of the IFRS Taxonomy 2008. Amendments to the 2009 IFRS Taxonomy mainly reflect changes in IFRSs. However, improvements in the syntax (not affecting semantics) of the taxonomy have led to a decrease in size and download time.

The IFRS Taxonomy 2009 was reviewed by the external XBRL Quality Review Team (XQRT) that was established by the IASC Foundation at the end of 2007. Interested parties are invited to access the near final version of the IFRS Taxonomy 2009 and submit comments by 12 March 2009.

In accordance with XBRL International policy the near final version of the IFRS Taxonomy 2009 is freely available on the IASB Website. The final version is expected to be released in early April 2009, when it will also be freely available.

December 19, 2008

The IFAC Update provides summaries of IFAC developments over the past month.

IFAC RELEASES RESULTS OF 2008 GLOBAL LEADERSHIP SURVEY; NEW FINANCIAL CRISIS WEBSITE IS LAUNCHED

To mark the beginning of World Accountancy Week, IFAC released the results of its 2008 Global Leadership Survey. Chief executives and presidents of 110 accountancy organizations worldwide responded to this annual survey that focused on the current credit crisis and other key issues for the profession. Respondents reported an increased trend in the need for services that are related in some way to the crisis, demonstrating an increased awareness of the value of professional accountants. Respondents indicated that the following issues will be of greatest importance to them in the coming year:

· Addressing the needs of small and medium enterprises (SMEs) and small and medium practices (SMPs);

· Transitioning to International Standards on Auditing;

· Meeting expectations to identify and prevent fraud; and

· Dealing with the changing regulatory landscape.

The survey also showed that the majority of organizations have been working to identify and execute appropriate responses to the crisis and to support their members. Many of these initiatives are featured on IFAC's website on its new page on the global financial crisis (http://www.ifac.org/financial-crisis/). If your organization has materials dedicated to the financial crisis that you would like to have appear on this webpage, please email them to This email address is being protected from spam bots, you need Javascript enabled to view it .

To view the 2008 Global Leadership Survey Summary of Results, visit http://web.ifac.org/download/2008_IFAC_Global_Leadership_Survey.pdf.

IFAC ISSUES NEW PAPER ON STANDARD-SETTING PROCESS

During World Accountancy Week, IFAC released a new policy position paper on International Standard Setting in the Public Interest. This paper outlines the rationale for the regulatory arrangements put in place for setting international standards for auditing and assurance, ethics and accounting education. Additionally, it explains how responsibility for international standard setting in these areas is shared by IFAC and the regulatory community to produce high quality standards that are in the public interest. The paper can be downloaded from the IFAC website by going to http://www.ifac.org/store.

HELP SELECT THE 2008 ARTICLE OF MERIT WINNER

IFAC’s Professional Accountants in Business (PAIB) Committee recognized World Accountancy Week with the launch of a new feature of its 2008 Article of Merit Award Program. This year, the committee is seeking your help in selecting the award winner. The program seeks to identify and promote outstanding articles on financial and management accounting topics by IFAC member bodies. This is the first time that individual accountants worldwide have been invited to be part of the selection process. Judges have selected 10 articles to be considered for the award. Please rate the usefulness of each of these articles by visiting the Articles of Merit Rating Page. The winning article will be announced in early 2009.

IFAC BOARD APPROVES NEW POLICY ON TRANSLATION

The IFAC Board has approved a new policy statement for the translation of standards - Policy for Translating and Reproducing Standards Issued by the International Federation of Accountants. This new policy statement only applies when a translating body translates and reproduces any of the final standards issued by IFAC standard-setting boards. The objectives of this policy are:

· To encourage one quality translation of the standards per language;

· To achieve a faithful translation of the standards;

· To achieve a timely translation of the standards, and

· To ensure that translations of the standards are regularly updated.

The policy will become effective beginning January 1, 2009. The policy statement may be downloaded by visiting http://www.ifac.org/Translations/.

IAASB CLARITY PROJECT NEARS COMPLETION; ISSUES EIGHT STANDARDS

The International Auditing and Assurance Standards Board (IAASB), has released seven clarified International Standards on Auditing (ISAs) and one clarified International Standard on Quality Control (ISQC). These ISAs form part of the IAASB's program to redraft existing standards following the clarity drafting conventions. To date, the IAASB has released 29 final clarity redrafted ISAs and 1 final clarity redrafted ISQC.

The IAASB released:

· International Standard on Quality Control (ISQC) 1 (Redrafted), Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements;

· ISA 220 (Redrafted), Quality Control for an Audit of Financial Statements;

· ISA 500 (Redrafted), Audit Evidence;

· ISA 501 (Redrafted), Audit Evidence—Specific Considerations for Selected Items;

· ISA 505 (Revised and Redrafted), External Confirmations;

· ISA 520 (Redrafted), Analytical Procedures;

· ISA 620 (Redrafted), Using the Work of an Auditor’s Expert; and

· ISA 710 (Redrafted), Comparative Information—Corresponding Figures and Comparative Financial Statements.

The complete set of clarified ISAs will be effective for audits of financial statements for periods beginning on or after December 15, 2009. The ISAs can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/store. The IAASB also plans to publish the set of clarified ISAs in a handbook, expected to be released in April 2009.

IAASB Nears Finalization of the Clarity Project with the Issuance of Eight Standards

(New York/December 15, 2008) – The International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), moves closer to completion of its Clarity Project* today with the release of seven clarified International Standards on Auditing (ISAs) and one clarified International Standard on Quality Control (ISQC), following the consideration and approval by the Public Interest Oversight Board (PIOB) of the due process. To date, the IAASB has released 29 final redrafted ISAs and one final redrafted ISQC in the new clarity style.

Titles of the newly issued standards are as follows:

International Standard on Quality Control (ISQC) 1 (Redrafted), Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements
ISA 220 (Redrafted), Quality Control for an Audit of Financial Statements
ISA 500 (Redrafted), Audit Evidence
ISA 501 (Redrafted), Audit Evidence—Specific Considerations for Selected Items
ISA 505 (Revised and Redrafted), External Confirmations
ISA 520 (Redrafted), Analytical Procedures
ISA 620 (Redrafted), Using the Work of an Auditor’s Expert
ISA 710 (Redrafted), Comparative Information—Corresponding Figures and Comparative Financial Statements
The PIOB has also considered and approved the due process of four additional ISAs that were approved by the IAASB at its September 2008 meeting. However, in finalizing ISA 210 (Redrafted), Agreeing the Terms of Audit Engagements, at its meeting last week, the IAASB approved conforming amendments to the following four reporting standards:

ISA 700 (Redrafted), Forming an Opinion and Reporting on Financial Statements;
ISA 800 (Revised and Redrafted), Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks;
ISA 805 (Revised and Redrafted), Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement; and
ISA 810 (Revised and Redrafted), Engagements to Report on Summary Financial Statements.
The IAASB agreed that these four ISAs will be issued only after the PIOB has considered and approved the due process applied to ISA 210 (Redrafted), which is expected in February 2009. The IAASB recognizes that the four reporting standards present fewer implementation challenges than other ISAs, and so the interest in issuing a final text including conforming changes outweighs the desire to make them immediately available.

IAASB Chair John Kellas commented on the IAASB’s progress: “The approval of the twelve standards now cleared by the PIOB made the IAASB’s September meeting one of its most productive. It also kept us firmly on our timetable for completion of the Clarity Project by the end of 2008. By issuing eight of these standards today we are fulfilling our commitment to make the standards available as soon as practicable. As noted in the Clarity Project Update, early attention given to implementation of the clarified ISAs is of the utmost importance.”

In addition to ISA 210 (Redrafted), at its meeting last week the IAASB approved new ISA 265, Communicating Deficiencies to Those Charged with Governance and Management, and ISA 402 (Revised and Redrafted), Audit Considerations Relating to an Entity Using a Service Organization. Subject to PIOB approval, these ISAs will be released in March 2009. The IAASB has also agreed to changes in the approved clarified ISAs as a result of a review for consistency and other matters of clarity; they will be made available on the IAASB’s website in early 2009.

The IAASB considers that, with its approval of the final three ISAs (subject to PIOB approval) and its review of consistency, its work in redrafting its international standards under the Clarity Project is now complete.

The complete set of clarified ISAs will be effective for audits of financial statements for periods beginning on or after December 15, 2009. The ISAs can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/store . The IAASB also plans to publish the set of clarified ISAs in a handbook, expected to be released in April 2009.

IFAC INIVITES PROFESSIONAL ACCOUNTANTS In Business to HELP SELECT the 2008 Article of Merit award winner

(New York/December 10, 2008) – 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.

GLOBAL ACCOUNTANCY LEADERS ADDRESS CREDIT CRISIS AND FOCUS ON NEEDS OF SMALL BUSINESS

(New York/December 8, 2008) – 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.

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

Accountancy Institutes

Country and Name of Organization:

Albania
Institute of Authorized Chartered Auditors of Albania

Argentina
Federación Argentina de Consejos Profesionales de Ciencias Económicas

Armenia
Association of Accountants and Auditors of Armenia

Australia
CPA Australia

Australia
National Institute of Accountants in Australia

Australia
The Institute of Chartered Accountants in Australia

Bangladesh
The Institute of Cost and Management Accountants of Bangladesh

Belgium
Institut des Experts-comptables et des Conseils fiscaux

Belgium
Institut des Réviseurs d'Entreprises

Bolivia
Colegio de Auditores de Bolivia

Botswana
Botswana Institute of Accountants

Brazil
Instituto dos Auditores Independentes do Brasil

Brazil
Conselho Federal de Contabilidade

Bulgaria
Institute of Certified Public Accountants of Bulgaria

Cameroon
Ordre National des Experts Comptables du Cameroun

Canada
The Canadian Institute of Chartered Accountants

Canada
Certified General Accountants' Association of Canada

Cayman Islands
Cayman Islands Society of Professional Accountants

China
Chinese Institute of Certified Public Accountants

Colombia
Instituto Nacional de Contadores Públicos de Colombia

Costa Rica
Colegio de Contadores Públicos de Costa Rica

Cyprus
The Institute of Certified Public Accountants of Cyprus

Czech Republic
Chamber of Auditors of the Czech Republic

Estonia
Audiitorkogu (Estonian Auditing Board)

Fiji
Fiji Institute of Accountants

Finland
HTM-tilintarkastajat ry - GRM- revisorer rf

France
Conseil Supérieur de l'Ordre des Experts-Comptables

France
Compagnie Nationale des Commissaires aux Comptes

Georgia
Georgian Federation of Professional Accountants and Auditors

Germany
Institut der Wirtschaftsprüfer in Deutschland e.V.

Ghana
Institute of Chartered Accountants - Ghana

Haiti
Ordre des Comptables Professionels Agrees d'Haiti

Hong Kong
Hong Kong Institute of Certified Public Accountants

India
The Institute of Cost and Works Accountants of India

India
The Institute of Chartered Accountants of India

Indonesia
Indonesian Institute of Accountants

Iran
Iranian Association of Certified Public Accountants

Iraq
Iraqi Union of Accountants and Auditors

Ireland
The Institute of Certified Public Accountants in Ireland

Israel
Institute of Certified Public Accountants in Israel

Italy
Consiglio Nazionale dei Dottori Commercialisti e Degli Esperti Contabili

Japan
The Japanese Institute of Certified Public Accountants

Kazakhstan
Chamber of Auditors of the Republic of Kazakhstan

Kenya
Institute of Certified Public Accountants of Kenya

Korea
Korean Institute of Certified Public Accountants

Kosovo
Society of Certified Accountants and Auditors of Kosovo

Lebanon
Lebanese Association of Certified Public Accountants

Lesotho
Lesotho Institute of Accountants

Lithuania
Lithuanian Chamber of Auditors

Malawi
The Society of Accountants in Malawi

Malaysia
Malaysian Institute of Accountants

Malaysia
Malaysian Institute of Certified Public Accountants

Malta
The Malta Institute of Accountants

Mexico
Instituto Mexicano de Contadores Públicos, A.C.

Moldova
Association of Professional Accountants & Auditors of the Republic of Moldova

Namibia
Institute of Chartered Accountants of Namibia

Nepal
The Institute of Chartered Accountants of Nepal

New Zealand
New Zealand Institute of Chartered Accountants

Nigeria
The Institute of Chartered Accountants of Nigeria

Norway
Den Norske Revisorforening

Pakistan
Institute of Chartered Accountants of Pakistan

Pakistan
Institute of Cost and Management Accountants of Pakistan

Poland
Accountants Association in Poland

Poland
National Chamber of Statutory Auditors

Romania
Chamber of Financial Auditors of Romania

Romania
Corpul Expertilor Contabili si Contabililor Autorizati din Romania

Russia
The Institute of Professional Accountants of Russia

Saudi Arabia
Saudi Organization for Certified Public Accountants

Senegal
Ordre National des Experts Comptables et Comptables Agréés du Sénégal

Serbia
Serbian Association of Accountants and Auditors

Singapore
Institute of Certified Public Accountants of Singapore

Slovenia
The Slovenian Institute of Auditors

South Africa
South African Institute of Professional Accountants

South Africa
The South African Institute of Chartered Accountants

Spain
Instituto de Censores Jurados de Cuentas de España

Swaziland
Swaziland Institute of Accountants

Sweden
FAR SRS

Switzerland
Treuhand-Kammer

Tanzania
National Board of Accountants and Auditors - Tanzania

Tunisia
Ordre des Experts Comptables de Tunisie

Turkey
Expert Accountants' Association of Turkey

Turkey
Union of Chambers of Certified Public Accountants of Turkey

Uganda
Institute of Certified Public Accountants of Uganda

Ukraine
Ukrainian Federation of Professional Accountants and Auditors

United Kingdom
Association of Accounting Technicians

United Kingdom
Institute of Chartered Accountants of Scotland

United Kingdom
The Association of Chartered Certified Accountants

United Kingdom
The Chartered Institute of Management Accountants

United Kingdom
The Institute of Chartered Accountants in England & Wales

United Kingdom
The Chartered Institute of Public Finance and Accountancy

United States
American Institute of Certified Public Accountants

United States
Institute of Management Accountants

United States
National Association of State Boards of Accountancy

11 Anonymous
Responses from Members and Associates

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

IFAC EXAMINES DEVELOPMENTS IN PUBLIC SECTOR PERFORMANCE MEASUREMENT STRUCTURES

(New York/November 6, 2008) – 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.

The full report can be downloaded free-of-charge from the PAIB section of the IFAC online bookstore at http://www.ifac.org/store .

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.

IFAC SUPPORTS CONVERGENCE IN THE REPORTING OF FINANCIAL INSTRUMENTS

(New York/October 17, 2008) – The International Federation of Accountants (IFAC) supports recent moves by the International Accounting Standards Board (IASB) to contribute to greater consistency in financial reporting and to work towards convergence of international standards, an objective which IFAC views as critical to the efficient operation of global capital markets.

While accepting the value of moving rapidly to remove differences in the application of fair value accounting in different jurisdictions, IFAC strongly opposes attempts to change more radically, or to suspend, the use of fair value accounting without adequate due process. In particular, IFAC considers that making changes at a national or regional level that exacerbate reporting differences would serve to further confuse financial markets and would result in a reduction of confidence in financial reporting - exactly the opposite of what is required in current circumstances. “Reducing transparency is not the answer,” says IFAC President Fermín del Valle, “and it will not serve the interests of investors.”

IFAC believes that the additional guidance given to those applying both accounting and auditing standards relating to fair values has been very valuable and will contribute to the public interest through more consistent application of the standards. This guidance has come from the IASB and the United States Financial Accounting Standards Board, as well as from the International Auditing and Assurance Standards Board in its Staff Audit Practice Alert, Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment.

IFAC and its independent standard-setting boards are continuing to monitor the impact of the credit crisis and will consider whether further guidance is needed.

FORUM OF FIRMS FOCUS ON AUDITS OF FINANCIAL INSTITUTIONS

(New York/October 9, 2008) – Over 60 partners from 21 international networks of accounting firms met yesterday to share their experiences, industry insights and current practices for audits of financial institutions at a symposium on the Audit of Financial Institutions organized by the Forum of Firms. Several panels of experts were assembled with the support of the six large networks to lead discussions on various topics including valuation and impairment, liquidity, market confidence, and going concern.

“This event was an initiative by the Forum of Firms to examine current practice in addressing the auditing and financial reporting issues resulting from the current events in the market and to consider the International Auditing and Assurance Standards Board (IAASB’s) latest guidance in this area,” states David Devlin, Symposium Chair.

The symposium included a review of current accounting and auditing guidance issued in response to the credit crisis. Symposium participants noted particularly the IAASB’s new Staff Audit Practice Alert – Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment. This is relevant to audits of all entities that have investments in financial instruments, especially those in illiquid markets.

The symposium concluded with a discussion of specific auditing responses appropriate in audits of financial statements of financial institutions. These include the importance of strong risk management and transparent disclosure for restoring market confidence as well as heightened sensitivity to going concern issues.

“This symposium was designed to disseminate good practice in an area of critical importance in today’s environment and to support the Forum’s members in providing the highest quality audit services to their clients and the public,” points out David Maxwell, chair of the Forum of Firms.

About the Forum of Firms

The Forum of Firms is an association of networks of international accounting firms that perform transnational audits. Members of the Forum have committed to adhere to and promote the consistent application of high quality audit practices worldwide, including the use of International Standards on Auditing, and the maintenance of appropriate quality control standards in accordance with International Standards on Quality Control issued by the International Auditing and Assurance Standards Board. Through their organizations, members also conduct globally coordinated internal quality assurance reviews on a regular basis and have policies and methodologies that conform to the International Federation of Accountants’ Code of Ethics for Professional Accountants. The Transnational Auditors Committee is the Executive Committee of the Forum of Firms and a committee of the International Federation of Accountants.

For additional details on the Forum of Firms, please visit: http://www.ifac.org/Forum_of_Firms/ .

NEW IAASB AUDIT PRACTICE ALERT FOCUSES ON FAIR VALUE ACCOUNTING ESTIMATES

(New York/October 6, 2008) – To assist auditors in addressing the challenges of auditing fair value accounting estimates, 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), today released an audit practice alert. The alert was developed following consultation with the IAASB’s Task Force on Fair Value Auditing Guidance, which is considering the need for new or modified guidance in light of current marketplace issues.

The purpose of the alert is to highlight areas within the International Standards on Auditing (ISAs) that are particularly relevant in the audit of fair value accounting estimates in times of market uncertainty.

James Sylph, Executive Director, Professional Standards, noted, “Recent events in some of the world’s largest financial markets continue to call attention to the difficulties in establishing fair values. This Staff Audit Practice Alert responds to calls from the Financial Stability Forum and others for further guidance on the audit of fair value accounting estimates. I believe this alert will be relevant to auditors of entities of all sizes as they prepare for the next audit season.”

The alert also directs auditors to the recently revised ISA 540 (Revised and Redrafted), Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures, which was influenced by the changes in the credit markets during 2007. While not effective until audits of financial periods commencing on or after December 15, 2009, it includes guidance that is likely to be useful to auditors planning their 2008 engagements.

The practice alert, Challenges in Auditing Fair Value Accounting Estimates in the Current Market Environment, may downloaded free of charge from the IFAC website (www.ifac.org). For more information on the other IAASB initiatives with regard to fair value, please visit http://www.ifac.org/IAASB/ProjectHistory.php?ProjID=0080.

IAASB Issues Seven Revised ISAs, Including Updated Standard ON Scope of Audit and Auditor’s Role

(New York/October 2, 2008) – The International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), today released seven International Standards on Auditing (ISAs) following the consideration and approval of due process by the Public Interest Oversight Board (PIOB). The ISAs are in the new style following the conventions developed in the IAASB’s project to improve the clarity, and therefore the application, of its standards. Some of the standards released today have been substantively revised, while others have been redrafted to apply the new conventions. The standards will provide further momentum toward achieving convergence and contribute to enhancing understanding of the purpose and scope of audits, and their effective conduct.

The New Standards

The clarified ISAs include ISA 200 (Revised and Redrafted), Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing. This fundamental ISA contains an overview of an audit to aid in understanding its purpose and scope; defines the respective authority of the requirements and guidance in ISAs; and contains the most fundamental requirements for auditors. It emphasizes the importance of sound and consistent professional judgment by the auditor, and the necessity for sufficient audit evidence to support the auditor’s opinion.

John Kellas, IAASB Chairman, explained, “The issuance of ISA 200 (Revised and Redrafted) is a milestone for the IAASB in that it codifies the principles underpinning the interpretation of standards drafted using the clarity conventions. As the overarching standard to all other ISAs, ISA 200 (Revised and Redrafted) establishes the basic objective and obligations of the auditor, and sets out how the objectives, requirements and guidance in all ISAs are to be understood.”

In addition to ISA 200 (Revised and Redrafted), the IAASB also released:

·         ISA 320 (Revised and Redrafted), Materiality in Planning and Performing an Audit;

·         ISA 450 (Revised and Redrafted), Evaluation of Misstatements Identified during the Audit;

·         ISA 530 (Redrafted), Audit Sampling;

·         ISA 610 (Redrafted), Using the Work of Internal Auditors;

·         ISA 705 (Revised and Redrafted), Modifications to the Opinion in the Independent Auditor’s Report; and

·         ISA 706 (Revised and Redrafted), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report.

“In clarifying the ISAs, the IAASB aimed to eliminate any possible ambiguity within the extant standards and to drive more consistent application by auditors. The revisions released today in particular upgrade the standards in the important areas of materiality and misstatements and reporting by the auditor,” noted Mr. Kellas.

These ISAs form part of the IAASB's program to redraft existing standards following the clarity drafting conventions. * To date, the IAASB has released 22 final clarity redrafted ISAs. The IAASB is on track to finalize its complete set of clarified ISAs by the end of this year. All clarified ISAs will be effective from a single date, for audits of financial statements for periods beginning on or after December 15, 2009.

The ISAs can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/store.

IFAC SUPPORTs A SINGLE SET OF AUDITING STANDARDS

(New York/October 1, 2008) – The International Federation of Accountants (IFAC) today issued a policy position titled IFAC’s Support for a Single Set of Auditing Standards: Implications for Audits of Small and Medium-sized Entities. The paper sets out IFAC’s view that International Standards on Auditing (ISAs) are designed to be applicable to audits of financial statements of entities of all sizes, and highlights the ways in which the International Auditing and Assurance Standards Board (IAASB) considers the needs and perspectives of small- and medium-sized entities (SMEs) in the development of those standards.

The paper emphasizes that the consistent use of the ISAs is essential to meeting the public interest expectations of an audit. If auditors intend to issue an ISA audit report, they must comply with the ISAs. This enables a consistent level of assurance to be associated with the word “audit,” and allows users to make decisions in the light of a common understanding about the reliability of financial statements. The paper also emphasizes the importance of professional judgment in determining the most effective approach for a particular audit.

The paper points out that SMEs have an alternative to obtaining an audit; they may obtain a review of their financial statements. International Standard on Review Engagements 2400, Engagements to Review Financial Statements, requires a different level of work effort by the practitioner and results in a different and lower level of assurance. The IAASB will be considering changes to this standard in light of the current needs of the marketplace. A new consultation paper, commissioned by the IAASB and developed by staff of several national auditing standard setters, seeks input on the elements that would provide a relevant and cost-effective assurance service that is an alternative to an audit for SMEs in particular. IFAC encourages the broader accountancy community to assist the work of the IAASB by responding to this consultation paper.*

(New York /September 3, 2008) – The International Public Sector Accounting Standards Board (IPSASB), an independent standard-setting board within the International Federation of Accountants (IFAC), is seeking comments on its proposed changes to IPSAS 5, Borrowing Costs, set forth in exposure draft (ED) 35, Borrowing Costs (Revised 200X).

“Public sector entities borrow for a variety of reasons, most of which are unrelated to asset acquisition,” said Mike Hathorn, Chair of the IPSASB. “The IPSASB concluded that requiring public sector entities to capitalize borrowing costs as part of the cost of qualifying assets would not satisfy the qualitative characteristics of general purpose financial reporting, particularly related to the reliability of information reported. The immediate expensing of these borrowing costs instead will enhance the accountability of public sector entities.”

Most notably, ED 35 proposes amendments to reflect that in many circumstances the capitalization of borrowing costs as part of the cost of an asset is not appropriate for public sector entities. This view, a departure from both IPSAS 5 and the International Accounting Standards Board’s International Accounting Standard 23, Borrowing Costs, is an evolution from public sector consideration of the issue. The ED proposes that entities recognize borrowing-related expenses, such as interest or loan origination fees, during the period in which they are incurred. The ED also proposes, however, that where entities borrow funds specifically to acquire, construct or produce a qualifying asset, the entity has the option to capitalize those costs as part of the cost of that asset.

ED 35 may be viewed and downloaded, free-of-charge, by going to http://www.ifac.org/EDs . The IPSASB values the public’s opinion and welcomes comments on its decision to require entities to expense borrowing costs, except in the circumstances outlined.

How to Comment
Comments on ED 35 are requested by January 7, 2009, and may be submitted via email at This email address is being protected from spam bots, you need Javascript enabled to view it . Comments can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 6th Floor, and Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and, ultimately, will be posted on the IFAC website.

IFAC’S INTERNATIONAL ACCOUNTING EDUCATION STANDARDS BOARD RELEASES UPDATED EDUCATION PRONOUNCEMENTS

(New York/August 11, 2008) – To ensure that its pronouncements remain clear and relevant, the International Accounting Education Standards Board (IAESB), an independent standard-setting board within the International Federation of Accountants (IFAC), has released amended versions of its International Education Standards (IESs) and related education pronouncements. The amendments result in more consistent use of terminology throughout the standards and more clearly describe the role of the IAESB and its standard-setting process, including oversight of its work by the Public Interest Oversight Board.

The amended documents comprise the Framework for International Education Pronouncements, the Introduction to International Education Standards, and International Education Standards 1-8, all of which were published between 2003 and 2006. Given the editorial nature of the changes, the IAESB felt that public consultation was not necessary and the amended documents were approved by the IAESB at its May 2008 meeting.

In addition to these editorial amendments, the IAESB has commenced a project to substantively revise the Framework and the Introduction. As part of that project, the IAESB will seek public comments on changes to these documents.

The amended versions of IESs 1-8, the Framework and the Introduction can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/store . For more information on the IAESB’s work program, visit http://www.ifac.org/education .

About the IAESB and IFAC

The IAESB, an independent standard-setting board within IFAC, develops standards and guidance on prequalification education, training, and continuing professional education and development for all members of the accountancy profession. The Public Interest Oversight Board oversees the activities of the IAESB 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 education standards through the IAESB, IFAC, through its independent standard-setting boards, sets standards on ethics, auditing and assurance, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

IFAC’S INTERNATIONAL ETHICS STANDARDS BOARD ISSUES PROPOSALS TO CLARIFY CODE OF ETHICS FOR ACCOUNTANTS

(New York/July 15, 2008) – To further promote and facilitate accountants’ adherence to high ethical and independence standards, the International Ethics Standards Board for Accountants (IESBA), an independent standard-setting board within the International Federation of Accountants (IFAC), has proposed changes to the IFAC Code of Ethics for Professional Accountants. The changes, outlined in an exposure draft with the same title, focus on enhancing the clarity of the Code. The proposed changes make clear the specific requirements that are contained in the Code and refine the application of the Code’s conceptual framework.

“The proposals significantly enhance the clarity and understandability of the provisions in the Code,” states Richard George, IESBA Chair. “We believe that the revised Code will provide a strong foundation to further the IESBA’s objective of facilitating convergence of international and national ethical standards.”

Comments on the exposure draft are requested by October 15, 2008. The exposure draft may be viewed by going to http://www.ifac.org/EDs. Comments may be submitted by email to This email address is being protected from spam bots, you need Javascript enabled to view it . They can also be faxed to the attention of the IESBA Senior Technical Manager at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC’s website.

About the IESBA and IFAC

The IESBA develops ethical standards and guidance for use by professional accountants. It encourages member bodies of IFAC to adopt high standards of ethics for their members and promotes good ethical practices globally. The Public Interest Oversight Board oversees the activities of the IESBA 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 standards of ethics through the IESBA, IFAC, through its independent standard-setting boards, sets standards on auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high quality performance by professional accountants in business.

ARNOLD SCHILDER NAMED TO LEAD IFAC’S INTERNATIONAL AUDITING AND ASSURANCE STANDARDS BOARD

(New York/July 7, 2008) – The Board of the International Federation of Accountants (IFAC) has appointed Prof. Dr. Arnold Schilder, RA, to lead the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of IFAC, beginning January 1, 2009. Prof. Schilder’s appointment to a three-year term as IAASB Chair was approved by the Public Interest Oversight Board (PIOB)*, which oversees the IAASB’s activities, at its meeting in Madrid, Spain last week.

“Arnold Schilder brings both a breadth and depth of experience and strong integrity to the position of IAASB Chair,” states Fermín del Valle, IFAC President. “As its next chair, he will lead the IAASB in continuing to develop high quality international audit standards to be used around the world.”

Prof. Schilder is currently Executive Director of De Nederlandsche Bank NV, the prudential supervisor of financial institutions in the Netherlands. He is a member of the Basel Committee on Banking Supervision and served as Chairman of its Accounting Task Force from 1999 to 2006. Prof. Schilder has also served as a member of the PIOB and as Chairman of the European Interim Working Committee on Financial Conglomerates. In addition, he is a part-time professor of auditing at the University of Amsterdam and is a past President of the Koninklijk Nederlands Instituut van Registeraccountants, IFAC’s member body in the Netherlands. Previously, he was a senior international audit partner in PricewaterhouseCoopers (PwC) in the Netherlands and worked for PwC and predecessor firms from 1972 to 1998.

As chair, Prof. Schilder will lead the IAASB in its initiatives in setting high quality auditing and assurance standards and facilitating the convergence of international and national standards. He will play a key role in guiding the IAASB as it strives to enhance the quality and uniformity of audit practice throughout the world and to build public confidence in financial reporting.

“I am delighted to chair the IAASB during the next three years as it continues to fulfill its public interest mission,” states Prof. Schilder. “I will welcome the input of all our stakeholders, including users of IAASB standards, national standard setters, regulators, governments, and the public, as the IAASB addresses new assurance topics as well as promotes further the benefits of its standards to key constituencies that have not yet adopted them.”

For more information about the work of the IAASB, visit its home page at http://www.iaasb.org.

* The Public Interest Oversight Board (PIOB) was formally established in February 2005 to oversee IFAC’s auditing and assurance, ethics, and education standard-setting activities as well as the IFAC Member Body Compliance Program. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IAASB, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.

IFAC PROGRAM SPARKS INITIATIVES TO STRENGTHEN THE ACCOUNTANCY PROFESSION

AND ACHIEVE CONVERGENCE TO INTERNATIONAL STANDARDS

(New York/July 9, 2008) – The International Federation of Accountants (IFAC) Member Body Compliance Program, launched four years ago, has reached a major milestone in its mission to encourage accountancy organizations worldwide to work together with their members, regulators, standard setters, and other key stakeholders to strengthen the profession. The Compliance Program is comprised of a three-part process:

·         A member organization’s assessment of its country’s regulatory and standard-setting framework;

·         A self-assessment of the extent to which a member body has committed to international convergence of standards and promoted the implementation of strong quality assurance and enforcement regimes as specified in IFAC membership requirements; and

·         The development of action plans to further the convergence process and meet other IFAC membership requirements.

The Compliance Program is now in this third phase and, today, the action plans of IFAC members from six countries were publicly released on the IFAC website. The six members are:

·         Federación Argentina de Consejos Profesionales de Ciencias Económicas;

·         Botswana Institute of Accountants;

·         Chinese Institute of Certified Public Accountants;

·         Chamber of Auditors of the Czech Republic;

·         Institute of Certified Public Accountants of Kenya; and

·         Corpul Expertilor Contabili si Contabililor Autorizati din Romania.

Representing four different continents, these actions plans are reflective of the kinds of programs and activities that all IFAC member organizations are developing in their own jurisdictions.

“These action plans demonstrate the leadership of the profession in engaging country stakeholders, such as regulators, government officials, academics, and others in further enhancing the quality of the profession and ensuring greater consistency worldwide,” states Robert Mednick, Chair of the Compliance Advisory Panel that oversees the Member Body Compliance Program.

“Our expectation is that all of IFAC’s 157 member bodies in both developed and emerging countries will develop actions plans that address the key elements of convergence, the subsequent implementation of standards and new regulatory initiatives,” added Mednick.

To view the actions plans of IFAC member bodies as well as the responses to Parts 1 and 2 of the Compliance Program, go to http://www.ifac.org/ComplianceAssessment/published.php.

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