International Federation of Accountants

International Federation of AccountantsInternational Federation of Accountants

IFAC’s Initiatives to Strengthen the IFAC’s Initiatives to Strengthen the ProfessionProfession

Russell Guthrie, Director – Quality Assurance and Russell Guthrie, Director – Quality Assurance and Member Body RelationsMember Body Relations

14 June 200714 June 2007

• Overview of IFAC ActivitiesOverview of IFAC Activities

• IFAC Member Body Compliance ProgramIFAC Member Body Compliance Program

• Other Initiatives for Strengthening the Other Initiatives for Strengthening the ProfessionProfession

TopicsTopics

Today’s PresentationToday’s Presentation

• Expanding organization of 155 professional Expanding organization of 155 professional accountancy organizations in 118 countriesaccountancy organizations in 118 countries

• Represents 2.5 million accountants in public Represents 2.5 million accountants in public practice, education, government service, practice, education, government service, industry and commerceindustry and commerce

• Provides for public interest input and has public Provides for public interest input and has public oversightoversight

IFAC TodayIFAC Today

IFAC’s RoleIFAC’s Role

IFAC’s Mission IFAC’s Mission

To serve the public interest,To serve the public interest, IFAC will IFAC will

continue to strengthen the worldwide continue to strengthen the worldwide

accountancy profession and contribute to accountancy profession and contribute to

the development of strong international the development of strong international

economies by…economies by…


IFAC’s Mission IFAC’s Mission

• Establish and promote adherence to high Establish and promote adherence to high quality professional standards quality professional standards

• Further the international convergence of Further the international convergence of such standardssuch standards

• Speak out on public interest issues where Speak out on public interest issues where the profession’s voice is most relevantthe profession’s voice is most relevant


IFAC Serves the International ProfessionIFAC Serves the International Profession

• Professional Accountancy Organizations Professional Accountancy Organizations worldwideworldwide

• Large, medium and small firmsLarge, medium and small firms

• Developed and developing countriesDeveloped and developing countries

• Professionals in business, public practice, Professionals in business, public practice, and governmentand government


IFAC Standard SettingIFAC Standard Setting

• International Auditing and Assurance Standards International Auditing and Assurance Standards Board (IAASB)Board (IAASB)

• International Ethics Standards Board for International Ethics Standards Board for Accountants (IESBA) Accountants (IESBA)

• International Accounting Education Standards International Accounting Education Standards Board (IAESB)Board (IAESB)

• International Public Sector Accounting Standards International Public Sector Accounting Standards Board (IPSASB)Board (IPSASB)

IFAC Standard SettingIFAC Standard Setting

Serving the ProfessionServing the Profession

• Small and Medium Practices Committee Small and Medium Practices Committee (SMPC)(SMPC)

• Developing Nations Committee (DNC)Developing Nations Committee (DNC)

• Professional Accountants in Business Professional Accountants in Business (PAIB) Committee(PAIB) Committee

• Forum of Firms/Transnational Auditors Forum of Firms/Transnational Auditors Committee (FoF/TAC)Committee (FoF/TAC)

IFAC Service SectorsIFAC Service Sectors

Member Body Compliance ProgramMember Body Compliance Program

• Statements of Membership Obligations Statements of Membership Obligations (SMOs) serve as the foundation(SMOs) serve as the foundation

• Sets out requirements for existing members Sets out requirements for existing members

and applicantsand applicants

• Application process for new associates and Application process for new associates and

members has been significantly members has been significantly

strengthenedstrengthened

IFAC Compliance ProgramIFAC Compliance Program

Statements of Membership ObligationsStatements of Membership Obligations

• Quality assurance Quality assurance

• Accountancy educationAccountancy education

• Auditing and assurance standardsAuditing and assurance standards

• Public sector accountingPublic sector accounting

• EthicsEthics

• Investigation and disciplineInvestigation and discipline

• Accounting standardsAccounting standards


Fulfilling Membership ObligationsFulfilling Membership Obligations

• Participate in the Member Body Participate in the Member Body

Compliance Program Compliance Program

• Adopt international standards as an Adopt international standards as an

objectiveobjective

• Assist in implementation of the standardsAssist in implementation of the standards

• Demonstrate best endeavorsDemonstrate best endeavors

Membership ObligationsMembership Obligations

Program ComponentsProgram Components

• Part 1 – Fact-based questionnaire on the Part 1 – Fact-based questionnaire on the regulatory and standard-setting framework regulatory and standard-setting framework in a member’s home country in a member’s home country

• Part 2 – Self-assessment of compliance with Part 2 – Self-assessment of compliance with specific requirements of the SMOsspecific requirements of the SMOs

• Part 3 – IFAC Recommendations and MB Part 3 – IFAC Recommendations and MB preparation of action planspreparation of action plans

Compliance ProgramCompliance Program

Parts 1 and 2Parts 1 and 2

• High level of external interestHigh level of external interest– 80,000+ Views on IFAC website 80,000+ Views on IFAC website – International and national regulators International and national regulators – Donor communityDonor community– Institutional investors (FDI decisions)Institutional investors (FDI decisions)

• Emphasize to members importance of Emphasize to members importance of transparency and updating of informationtransparency and updating of information


Part 3Part 3

• Development of “Policy Recommendations” Development of “Policy Recommendations” by IFAC Staff based on Part 2 responsesby IFAC Staff based on Part 2 responses

• Member Bodies develop Action Plans based Member Bodies develop Action Plans based on the aboveon the above

• Action plans must be:Action plans must be:– RealisticRealistic– Specific (time frame and responsibility)Specific (time frame and responsibility)– ““Owned” by the member bodyOwned” by the member body


Part 3 – Key aspectsPart 3 – Key aspects

• Buy in by member body is essential to Buy in by member body is essential to successsuccess– Board/CouncilBoard/Council– Technical CommitteesTechnical Committees– ManagementManagement– Key VolunteersKey Volunteers

• Coordinate with WB-ROSC and IADB MIF Coordinate with WB-ROSC and IADB MIF activitiesactivities


Part 3 – Key aspectsPart 3 – Key aspects

• Iterative processIterative process

• Confirm RecommendationsConfirm Recommendations– 3 months3 months

• Prepare Action PlanPrepare Action Plan– 6 months6 months

• Monitoring Progress and Updating InfoMonitoring Progress and Updating Info– Every 6 monthsEvery 6 months



• Core principals:Core principals:– Encouragement and ImprovementEncouragement and Improvement

• What does the program require?What does the program require?– Commitment Commitment – CommunicationCommunication– Demonstrate ProgressDemonstrate Progress

• EnforcementEnforcement– SuspensionSuspension– ExpulsionExpulsion


• Supports the development of the accountancy Supports the development of the accountancy profession in all regions of the world profession in all regions of the world

• Produces materials to assist in development Produces materials to assist in development of professional accountancy bodiesof professional accountancy bodies

• Seeks resources and development assistance Seeks resources and development assistance

• Provides input to international standard Provides input to international standard setterssetters

Developing NationsDeveloping Nations

Developing Nations CommitteeDeveloping Nations Committee

• ““Establishing and Developing a Professional Establishing and Developing a Professional Accountancy Body”Accountancy Body”

– Provides practical guidance and examplesProvides practical guidance and examples

– Assists in identifying priorities for developing Assists in identifying priorities for developing organizationsorganizations

• Used as a template by the World Bank in Macedonia Used as a template by the World Bank in Macedonia when establishing a new accountancy bodywhen establishing a new accountancy body

• Used by ICPAK in Kenya when improving their Used by ICPAK in Kenya when improving their internal Governance structureinternal Governance structure


Tools and Guidance Tools and Guidance

• Mentoring GuidelinesMentoring Guidelines– Framework for partnerships between Framework for partnerships between

developed and developing bodies to increase developed and developing bodies to increase capacitycapacity

• Education Guidelines for Accounting Education Guidelines for Accounting Technicians Technicians


Tools and Guidance – in development Tools and Guidance – in development

• IFAC continues to strive for closer contact IFAC continues to strive for closer contact and exchange of information and exchange of information

• Work closely to identify development needsWork closely to identify development needs

• Work closely to identify useful common Work closely to identify useful common tools and reduce duplication of efforttools and reduce duplication of effort

• Facilitate and contribute to development Facilitate and contribute to development workwork


Collaboration With DonorsCollaboration With Donors

• World BankWorld Bank

• African Development BankAfrican Development Bank

• Inter American Development BankInter American Development Bank

• Asian Development BankAsian Development Bank

• US AIDUS AID

• UNCTADUNCTAD

• OthersOthers


Relationships Built To DateRelationships Built To Date

• Input into Standard SettingInput into Standard Setting– Input and involvement in IAASB processes and Input and involvement in IAASB processes and

task forcestask forces

– ““Think small” approachThink small” approach

– Supporting IASB’s project on SME standardsSupporting IASB’s project on SME standards

• Developing tools for smaller practitionersDeveloping tools for smaller practitioners– ISA Guide (Quarter 4, 2007)ISA Guide (Quarter 4, 2007)

– QC Guide (under consideration)QC Guide (under consideration)

IFAC SupportIFAC Support

Small and Medium Practices Committee Small and Medium Practices Committee

• Ethics Education ToolkitEthics Education Toolkit

• Guidance on Practical Experience Guidance on Practical Experience RequirementsRequirements

• Travel Subsidy for DN participation in Travel Subsidy for DN participation in IFAC Boards and Committees IFAC Boards and Committees

IFAC SupportIFAC Support

Other Initiatives Other Initiatives

• LiderazgoLiderazgo

• Pro actividadPro actividad

• ComunicaciónComunicación

Strengthening the ProfessionStrengthening the Profession

IFAC Member’s Commitment IFAC Member’s Commitment

• ImpulsarImpulsar

• RespectoRespecto

• Disposición a actuarDisposición a actuar

Strengthening the ProfessionStrengthening the Profession

IFAC’s Commitment IFAC’s Commitment

International Federation of AccountantsInternational Federation of Accountants

www.ifac.orgwww.ifac.org

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International Federation of Accountants