International Federation of Accountants Organizational Overview and Update April 2002

International Federation of AccountantsInternational Federation of Accountants

Organizational Overview and UpdateOrganizational Overview and Update

April 2002April 2002

IFAC Mission IFAC Mission

IFAC’s mission is the worldwide IFAC’s mission is the worldwide

development and enhancement of the development and enhancement of the

profession with harmonized standards to profession with harmonized standards to

enable it to provide services of consistently enable it to provide services of consistently

high quality in the public interest.high quality in the public interest.

IFAC OverviewIFAC Overview

IFAC TodayIFAC Today

IFAC currently has 156 member bodies in IFAC currently has 156 member bodies in

114 countries, representing more than 2.5 114 countries, representing more than 2.5

million accountants.million accountants.


Current EnvironmentCurrent Environment

The current and anticipated environment The current and anticipated environment demands that the international profession: demands that the international profession: • Respond to globalizationRespond to globalization• Address investor and regulator needsAddress investor and regulator needs• Meet expanding needs of businessMeet expanding needs of business• Rebuild public confidence in the Rebuild public confidence in the

accountancy profession accountancy profession


Current Action PlanCurrent Action Plan

Strengthening activities in five key areas:Strengthening activities in five key areas:• Standard Setting and GuidanceStandard Setting and Guidance• Regulation of the ProfessionRegulation of the Profession• Development of the ProfessionDevelopment of the Profession• Meeting Needs of AccountantsMeeting Needs of Accountants• CommunicationsCommunications


New International Auditing and Assurance New International Auditing and Assurance Standards Board (IAASBStandards Board (IAASB))

• Comprised of 10 member body representatives, 5 Comprised of 10 member body representatives, 5

from FoF and 3 public members from FoF and 3 public members

• Strengthen internal technical resourcesStrengthen internal technical resources

• Develop high-quality auditing standards Develop high-quality auditing standards

• Increase transparency in auditing-standard setting Increase transparency in auditing-standard setting

processprocess

• Obtain endorsement of ISAs from IOSCOObtain endorsement of ISAs from IOSCO

Standard Setting and GuidanceStandard Setting and Guidance

Code of Ethics for Professional AccountantsCode of Ethics for Professional Accountants

• Serves as a benchmark for codes of conduct of Serves as a benchmark for codes of conduct of accountants worldwideaccountants worldwide

• Approved stronger independence rules last NovemberApproved stronger independence rules last November - Conceptual framework approach (not prescriptive)- Conceptual framework approach (not prescriptive) - Highlight factors that pose - Highlight factors that pose threatthreat to independence to independence - Focus on - Focus on safeguardssafeguards to minimize threat to minimize threat


Public Sector Accounting Standards (IPSAC)Public Sector Accounting Standards (IPSAC)

• First authoritative international financial First authoritative international financial

reporting standards for public sector reporting standards for public sector

(OECD, World Bank, etc.)(OECD, World Bank, etc.)

• Designed to strengthen financial reporting Designed to strengthen financial reporting

and accountability of public sectorand accountability of public sector

• 17 standards issued to date17 standards issued to date


Education StandardsEducation Standards

• Action initiated to elevate education “guidelines” Action initiated to elevate education “guidelines”

to “standards”to “standards”

• ““Standards” designed to promote compliance (not Standards” designed to promote compliance (not

only consideration)only consideration)

• Address pre- and post-qualification education Address pre- and post-qualification education

requirements and emerging topics such as ITrequirements and emerging topics such as IT

• New standards to be exposed for comment in June; New standards to be exposed for comment in June;

Final issuance December 2002Final issuance December 2002



Strengthening activities in five key areas:Strengthening activities in five key areas:• Standard Setting and GuidanceStandard Setting and Guidance• Regulation of the ProfessionRegulation of the Profession• Development of the ProfessionDevelopment of the Profession• Meeting Needs of AccountantsMeeting Needs of Accountants• CommunicationsCommunications


Regulatory InitiativesRegulatory Initiatives

Regulatory regime comprised of 4 primary Regulatory regime comprised of 4 primary bodiesbodies

• Forum of Firms (FoF)Forum of Firms (FoF)• Transnational Auditors Committee (TAC)Transnational Auditors Committee (TAC)• Compliance CommitteeCompliance Committee• Independent Oversight BoardIndependent Oversight Board

Regulation of the ProfessionRegulation of the Profession

Forum of FirmsForum of Firms

ObjectiveObjective• To promote consistently high standards of To promote consistently high standards of

financial reporting and auditing worldwide financial reporting and auditing worldwide in the interest of the usersin the interest of the users


Forum of FirmsForum of FirmsFoF members will work to achieve this objective by:FoF members will work to achieve this objective by:• Comply with FoF Quality StandardComply with FoF Quality Standard• Subject policies, methodologies, and work to Subject policies, methodologies, and work to

periodic external quality assurance reviewperiodic external quality assurance review• Promote use of international auditing and Promote use of international auditing and

assurance standardsassurance standards• Involve in IFAC activities Involve in IFAC activities


Transnational Auditors Committee (TAC)Transnational Auditors Committee (TAC)

• IFAC Committee and executive arm of FOFIFAC Committee and executive arm of FOF• Responsibilities include: Responsibilities include:

- Connect FoF and IFAC Board - Connect FoF and IFAC Board

- Develop, maintain and administer the - Develop, maintain and administer the

Quality Assurance Review programQuality Assurance Review program

- Develop guidance regarding transnational audits- Develop guidance regarding transnational audits


Compliance CommitteeCompliance Committee

ObjectiveObjective

Encourage improvement and enhancement Encourage improvement and enhancement of standards within IFAC member bodies of standards within IFAC member bodies through greater compliance with standards, through greater compliance with standards, rules and guidelines issued by IFACrules and guidelines issued by IFAC


Compliance CommitteeCompliance Committee

Responsibilities include:Responsibilities include:• Evaluate potential member applications for Board Evaluate potential member applications for Board

considerationconsideration• Review member bodies’ harmonization of IFAC Review member bodies’ harmonization of IFAC

pronouncements with local rulespronouncements with local rules• Help member bodies comply with IFAC Help member bodies comply with IFAC

requirementsrequirements• Work closely with TAC to monitor FoF memberWork closely with TAC to monitor FoF member


Independent Oversight BoardIndependent Oversight Board

• Preserve and strengthen public confidence Preserve and strengthen public confidence in financial reporting and the integrity of the in financial reporting and the integrity of the audit processaudit process

• Review FoF quality control process and Review FoF quality control process and IFAC activitiesIFAC activities

• Draft charter was exposed for commentDraft charter was exposed for comment• Revisit framework in light of recent Revisit framework in light of recent

environmental changes.environmental changes.



Strengthening activities in five key areas:Strengthening activities in five key areas:• Standard Setting and GuidanceStandard Setting and Guidance• Regulation of the ProfessionRegulation of the Profession• Development of the ProfessionDevelopment of the Profession• Meeting Needs of Accountants Meeting Needs of Accountants • CommunicationsCommunications


International Forum on Accountancy International Forum on Accountancy Development (IFAD)Development (IFAD)

• IFAD was created in 1999 to improve financial reporting, IFAD was created in 1999 to improve financial reporting, auditing practice and corporate governanceauditing practice and corporate governance

• Currently comprised of over 30 public and private Currently comprised of over 30 public and private institutions institutions

• Developing and implementing country action plansDeveloping and implementing country action plans

Development of the ProfessionDevelopment of the Profession

Meeting the Needs of a Diverse Meeting the Needs of a Diverse ProfessionProfession

• SMP Task Force established to address needs of Small and SMP Task Force established to address needs of Small and Medium-Sized PracticesMedium-Sized Practices

• Working group established to focus on meeting the needs of Working group established to focus on meeting the needs of accountants in business, industry and commerceaccountants in business, industry and commerce

• IFAC’s web site provides a wide range of mostly free guidance for IFAC’s web site provides a wide range of mostly free guidance for the world’s accountants the world’s accountants

Support for AccountantsSupport for Accountants

Responding to Public ConcernResponding to Public Concern

Establishing international task force to study Establishing international task force to study and recommend principles of best practice in and recommend principles of best practice in the areas of ……the areas of ……

• Financial and business reportingFinancial and business reporting• Corporate governanceCorporate governance• Auditor performanceAuditor performance• Interim report expected in November 2002 Interim report expected in November 2002

　　　　 Final report to be issued inFinal report to be issued in March 2003March 2003

CommunicationsCommunications

Increased SpokesmanshipIncreased Spokesmanship

• Represent the profession to international Represent the profession to international bodiesbodies

• Express profession’s view to IOSCO and Express profession’s view to IOSCO and other international institutionsother international institutions

• Explain the profession’s role with respect to Explain the profession’s role with respect to public interest and other responsibilitiespublic interest and other responsibilities

CommunicationsCommunications


StrengtheningStrengthening• Standard Setting and GuidanceStandard Setting and Guidance• Regulation of the ProfessionRegulation of the Profession• Development of the ProfessionDevelopment of the Profession• Meeting Needs of AccountantsMeeting Needs of Accountants• CommunicationsCommunications

IFAC SummaryIFAC Summary

International Federation of AccountantsInternational Federation of Accountants

Documents

International Federation of Accountants Organizational Overview and Update April 2002