INTERNATIONAL FEDERATION OF ACCOUNTANTS

1
International Federation of Accountants
Organizational Overview and Update April 2002
2
IFAC Mission
IFAC Overview

• IFACs mission is the worldwide development and
  enhancement of the profession with harmonized
  standards to enable it to provide services of
  consistently high quality in the public interest.

3
IFAC Today
IFAC Overview

• IFAC currently has 156 member bodies in
• 114 countries, representing more than 2.5
• million accountants.

4
Current Environment
IFAC Overview

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

5
Current Action Plan
IFAC Overview

• Strengthening activities in five key areas
• Standard Setting and Guidance
• Regulation of the Profession
• Development of the Profession
• Meeting Needs of Accountants
• Communications

6
New International Auditing and Assurance
Standards Board (IAASB)
Standard Setting and Guidance

• Comprised of 10 member body representatives, 5
  from FoF and 3 public members
• Strengthen internal technical resources
• Develop high-quality auditing standards
• Increase transparency in auditing-standard
  setting process
• Obtain endorsement of ISAs from IOSCO

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Code of Ethics for Professional Accountants
Standard Setting and Guidance

• Serves as a benchmark for codes of conduct of
  accountants worldwide
• Approved stronger independence rules last
  November
• - Conceptual framework approach (not
  prescriptive)
• - Highlight factors that pose threat to
  independence
• - Focus on safeguards to minimize threat

8
Public Sector Accounting Standards (IPSAC)
Standard Setting and Guidance

• First authoritative international financial
  reporting standards for public sector (OECD,
  World Bank, etc.)
• Designed to strengthen financial reporting and
  accountability of public sector
• 17 standards issued to date

9
Education Standards
Standard Setting and Guidance

• Action initiated to elevate education
  guidelines to standards
• Standards designed to promote compliance (not
  only consideration)
• Address pre- and post-qualification education
  requirements and emerging topics such as IT
• New standards to be exposed for comment in June
  Final issuance December 2002

10
Current Action Plan
IFAC Overview

• Strengthening activities in five key areas
• Standard Setting and Guidance
• Regulation of the Profession
• Development of the Profession
• Meeting Needs of Accountants
• Communications

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Regulatory Initiatives
Regulation of the Profession

• Regulatory regime comprised of 4 primary bodies
• Forum of Firms (FoF)
• Transnational Auditors Committee (TAC)
• Compliance Committee
• Independent Oversight Board

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Forum of Firms
Regulation of the Profession

• Objective
• To promote consistently high standards of
  financial reporting and auditing worldwide in the
  interest of the users

13
Forum of Firms
Regulation of the Profession

• FoF members will work to achieve this objective
  by
• Comply with FoF Quality Standard
• Subject policies, methodologies, and work to
  periodic external quality assurance review
• Promote use of international auditing and
  assurance standards
• Involve in IFAC activities

14
Transnational Auditors Committee (TAC)
Regulation of the Profession

• IFAC Committee and executive arm of FOF
• Responsibilities include
• - Connect FoF and IFAC Board
• - Develop, maintain and administer the
• Quality Assurance Review program
• - Develop guidance regarding transnational
  audits

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Compliance Committee
Regulation of the Profession

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

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Compliance Committee
Regulation of the Profession

• Responsibilities include
• Evaluate potential member applications for Board
  consideration
• Review member bodies harmonization of IFAC
  pronouncements with local rules
• Help member bodies comply with IFAC requirements
• Work closely with TAC to monitor FoF member

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Independent Oversight Board
Regulation of the Profession

• Preserve and strengthen public confidence in
  financial reporting and the integrity of the
  audit process
• Review FoF quality control process and IFAC
  activities
• Draft charter was exposed for comment
• Revisit framework in light of recent
  environmental changes.

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Current Action Plan
IFAC Overview

• Strengthening activities in five key areas
• Standard Setting and Guidance
• Regulation of the Profession
• Development of the Profession
• Meeting Needs of Accountants
• Communications

19
International Forum on Accountancy Development
(IFAD)
Development of the Profession

• IFAD was created in 1999 to improve financial
  reporting, auditing practice and corporate
  governance
• Currently comprised of over 30 public and private
  institutions
• Developing and implementing country action plans

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Meeting the Needs of a Diverse Profession
Support for Accountants

• SMP Task Force established to address needs of
  Small and Medium-Sized Practices
• Working group established to focus on meeting the
  needs of accountants in business, industry and
  commerce
• IFACs web site provides a wide range of mostly
  free guidance for the worlds accountants

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Responding to Public ConcernEstablishing
international task force to study and recommend
principles of best practice in the areas of
Communications

• Financial and business reporting
• Corporate governance
• Auditor performance
• Interim report expected in November 2002
• Final report to be issued in March 2003

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Increased Spokesmanship
Communications

• Represent the profession to international bodies
• Express professions view to IOSCO and other
  international institutions
• Explain the professions role with respect to
  public interest and other responsibilities

23
Current Action Plan
IFAC Summary

• Strengthening
• Standard Setting and Guidance
• Regulation of the Profession
• Development of the Profession
• Meeting Needs of Accountants
• Communications

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International Federation of Accountants