Page 1 | Confidential and Proprietary Information IFAC and International Standard Setting – UPDATE

Page 1 | Confidential and Proprietary Information

IFAC and International Standard Setting – UPDATE


• Currently being developed, taking account of Strategy Review Survey– INTOSAI response

– Board approval in September; Council approval in November

• Proposals include the establishment of an International Standards Setting Forum– Membership: international standard setters and those affected by

international standards

– Objective: To discuss critical issues requiring action and intervention, including governance, due process, and adoption and implementation

IFAC Strategy for 2016-2018


• Supported by 82.6% of survey respondents; however, detailed comments …– Questioned membership and objective

– Strongly cautioned against duplication of efforts (e.g., Consultative Advisory Groups)

• Planning and Finance Committee expressed mixed support and suggested …– Modifying action to “explore whether to establish” a forum

– Clearly articulating the forum’s membership and objective before deciding whether it should be established

International Standard Setting Forum


• Professional Accountancy Organization (PAO) Capacity Building Program– Includes building

capacity of public sector accountants and auditors

Capacity Building


International Framework:Good Governance in the Public Sector

Good Governance in the Public Sector


• Accrual reporting is the benchmark

• Increasing IPSAS adoption

• Accrual budgeting gains support

• Financial management still weak

• Integrated reporting on the horizon

Public Sector Financial Reporting—Current Situation

Austria Russia

Brazil Slovakia

Chile South Africa

Columbia Spain

Costa Rica Switzerland

Estonia Thailand

Indonesia European Commission (for their

own financial statements)

Kenya North Atlantic Treaty Organization

(NATO)

New

Zealand

Organisation for Economic Co-

operation and Development

(OECD)

Panama United Nations System

Peru

Government debt fears spook global markets IMF: “IPSAS are the only international standards designed for the public sector” January, 2014


Transparency and Accountability in the Public Sector

• Accountability. Now.

– Campaign

– Coalition (INTOSAI invited to join)

– Workshops

– Capacity building

Page 8 | Proprietary and Copyrighted Information

International Public Sector Accounting Standards Board (IPSASB)

OUTPUTS

High-quality financial reporting standards and other publications for the public sector

Outreach and stakeholder engagement to raise awareness, acceptance and adoption

OUTCOME

That decision-making and accountability of public sector entities are improved and global fiscal stability and sustainability are enhanced by credible and transparent financial reporting that results from the adoption of accrual-based IPSASs

Strengthening public financial management and knowledge globally through increasing adoption of accrual-based IPSASs


Strategic Emphasis

Converge with IFRS

Maintain Existing IPSASs

Other Projects

Public Sector

Specific


Priorities

Social Benefits *

Non-Exchange Expenses

Heritage Assets / Infrastructure Assets

Revenues – Exchange and Non-Exchange

Maintain Existing IPSASs

Measurement

Emissions Trading Schemes *

Financial Instruments *

Public Sector Combinations * Employee Benefits IPSAS 25 *

Leases

Cash Basis IPSAS

Public Sector Specific


Influences and Factors

Coordination with Government Finance Statistics (GFS) and IFRS-Alignment where appropriate

European Public Sector Accounting Standards (EPSAS)-Monitoring developments

Stakeholder Outreach-Benefits of accrual-based IPSAS-Transition from cash/modified cash-basis to accrual basis


• "A Closer Look at:" series

• Implementation resources– IPSAS 33, First-time Adoption of Accrual Basis IPSAS

– Importance of Accrual-Based Financial Reporting in the Public Sector

– Study 14—Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities (Third Edition)

• Introduction to IPSAS Train-the-trainer

• IPSAS and Accrual Accounting News

IPSASB—Implementation Support

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International Auditing and Assurance Standards Board (IAASB)

• Key projects finalized– Auditor Reporting

• New Key Audit Matters section; revised modifications to opinions; enhanced reporting on going concern

– ISA 720 – Other Information• Enhanced work effort and reporting

– Disclosures (subject to PIOB approval)• Greater emphasis on disclosures through strengthened requirements and

enhanced application material; in particular in relation to qualitative disclosures

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• IAASB-supported “roll-out plan” with objectives of– Promoting awareness

– Informing and educating users

– Learning about experiences of those responsible for adopting and implementing the standards

– Preparing for post-implementation review

• Planned activities – Outreach and other communications

– Auditor Reporting Toolkit

Auditor Reporting - Implementation Support

New and revised Auditor Reporting standards are effective for periods ending on or after December 15, 2016

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• Available now– Auditor Reporting Fact Sheet– Basis for Conclusions– “At a Glance” publication – Publications on GC and KAM – Slide Presentation– Illustrative KAM examples – National Publications

• Coming soon− Listings & extracts of illustrative reports − Webcast and podcasts

Auditor Reporting Resources & Toolkit

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New and Forward IAASB Initiatives

• Review of Quality Control Standards – ISA 220 & ISQC 1

• Group Audits

• Professional Skepticism

• Financial Institutions– Including accounting estimates and fair values (ISA 540)

• Monitoring developments in Integrated Reporting and Data Analytics


International Ethics Standards Board for Accountants (IESBA) – Priority Projects

• Responding to non-compliance with laws and regulations– Re-ED issued May 2015; new response framework proposed

– Comments requested by Sept 4, 2015

• Improving structure of IESBA Code– Enhancing usability to facilitate adoption and implementation

– ED approval anticipated Dec 2015

• Review of safeguards in the Code– Clarity, appropriateness and effectiveness of safeguards

– ED approval anticipated Dec 2015

• IESBA supportive of ISSAI 30 initiative

Documents

Page 1 | Confidential and Proprietary Information IFAC and International Standard Setting – UPDATE