IFAC's Financial Statements are prepared in accordance with International Public Sector Accounting Standards^® (IPSAS^®) and include an independent auditor’s report.

President Gupta, ICAI leadership, distinguished colleagues, ladies and gentlemen, my name is In-Ki Joo. I am President of IFAC, the International Federation of Accountants.

I am proud to represent all of IFAC’s members and the work we do in a global context. It is my privilege and honor to speak with you.

Part of what brings us together today is also, of course, what is keeping us apart. Just two months ago, we didn’t expect the coronavirus would develop into pandemic that it has today. Now, it is afflicting almost every country throughout the world.

It is continuing to cause unprecedented challenges to our humanity, in terms of the public healthcare, economic stability and politics and culture.

It also now causes critical challenges to our profession.

I hope and I am sure that the world will cope with these challenges wisely and quickly through worldwide collaboration. I would like to thank you for accommodating my participation from afar, at my home in Seoul.

As we talk about global challenges and smart solutions, your thoughtful and proactive response to this crisis—balancing practical realities with our need to persist in our work—is a testament to your vision and leadership.

And I would like to congratulate you for this outstanding conference. I understand that about 50,000 people are joining this conference. Well done!

ICAI is one of IFAC’s more than 170 members in more than 130 countries, which together represent more than 3 million professional accountants. Since ICAI joined the IFAC family in 1977, ICAI members have served with distinction on the IFAC Board, its committees, and the international standard-setting boards that IFAC supports.

I want to acknowledge the service and leadership of several of your members:

• IESBA member Sanjiv Kumar Chaudhary
• My IFAC Colleague Kumar Raghu
• My IFAC Colleague and past CAPA president Manoj Fadnis
• My IFAC Colleague Naveen Gupta
• My IFAC Colleague, and your former president and Chair of the Executive Committee of the World Congress of Accountants 2022 Prafulla Chhajed

Thank you all for your commitment to the profession.

Now to turn to the topic at hand:

We know that COVID-19 is turning the world upside-down, but as a profession we can—and must—work to provide the essential services we need to bring to the global economy and civil society.

This conference, with the impressive lineup of speakers you have invited from around the world, is exactly the kind of engagement the profession needs right now. This crisis is worldwide; we are all facing the same problems, and we all need solutions.

The author of Sapiens, Yuval Noah Harari, predicted that after the storm passes, we will inhabit a different world. We may not be sure what kind of the world we are going to face, but this different world will include:

1. More digital communications rather than in-person contacts.
2. More environmental and public health protection.

On the other hand, the current business environments is being severely disrupted. As the result of lockdowns everywhere, closed borders are disrupting business locally and internationally, we have found that global economic cooperation is easily disrupted by the closed factories in affected regions.

This phenomenon has caused supply chain problems for global production lines from platform companies to local suppliers. Due to a severe lack of business transactions, a cash shortage and a dramatic decrease in profits awaits almost every business.

These companies, especially small- and medium-sized entities (SMEs), do not have enough cash to endure the several months during which there will be no sales. These types of businesses will soon face extreme liquidity problems with the distinct possibility of them becoming bankrupt.

This phenomenon threatens to be common across the world and hits SMEs and small- and medium-sized practices (SMPs) hardest.

Governments, societies, businesses, professionals, and every sector of society are making their best endeavors to stall this appalling chain reaction and restore the economy back to normal. Our profession, of course, should do its best to contribute to this endeavor.

As we can see in IFAC’s Vision, our profession is set to be essential to strong, sustainable organizations, financial markets, and economies.

Our profession must join the efforts in restoring the economy back to normal through persistent enhancement of the relevance and transparency of the business reports for decision makers and key stakeholders.

It is noted that in the US, the SEC released a public statement regarding the importance of disclosures related to COVID-19, particularly forward-looking disclosures to provide investors and the markets with information necessary to make informed decisions.

Integrated reporting can be an efficient and effective tool to communicate an entity’s strategies for the future to key stakeholders. But it becomes an even bigger challenge to prepare an integrated reporting under the current disruptive circumstances.

In addition to this, I would like to offer a few thoughts on how to handle what we have already seen, and how to prepare for challenges on the horizon.

Some challenges we are now facing.

We can see many things coming to our profession.

For organizations facing deadlines for reporting, for example, the loss of time and the restrictions of physical distancing will affect the ability of auditors, preparers, and issuers to do their jobs and report their findings promptly.

Our list of challenges is formidable and the uncertainty around them is significant.

• How will we respond to physical disruptions not only in our clients’ operations, but also our own?
• What if audit evidence available during this crisis is simply too little or too weak to inform an audit opinion in time for legal deadlines?
• How will asset devaluation affect the viability of countless businesses, and raise questions around Going Concern status?
• How will we deal with legal and contractual non-compliance as supply chains crumble and cash flows dry up?
• How will professional accountants meet their continuing professional development (CPD) requirements?
• What should we do to promote the well-being of individual professional accountants?
• And how do we handle the onboarding of new hires?

These are just a few of the many enormous questions we must answer. These questions are way more relevant to SMEs and SMPs.

The many insights of the contributors to our discussion today will help the accountancy profession learn, focus, and adapt. But we should not expect to solve all of our problems today. We will have to live with uncertainty about this virus—maybe for a long time.

We are used to the idea that change is coming.

The urgency and scale of the COVID-19 crisis is exceptional, but for professional accountants, the necessity of growth and adaptation is not. Fundamentally, our goals have not changed. A financial statement is still a financial statement, and an audit is still an audit. However, many of the ways we achieve them will change.

The imperative for all of us is creativity and flexibility. Using digital tools is a good place to start. Inventory observation, for example, cannot proceed in-person when lockdown orders keep auditors from visiting their clients. But some auditors might be able to video conference into their clients’ facilities to check inventory remotely.

Of course, this example that I have just raised is quite narrow compared to the broader issues we must consider. There might be dead-ends—things we find we cannot do right now, and that must be postponed.

These will be important issues to define and raise with clients and with regulators as soon as possible, as they will substantially affect audit opinions.

IFAC is working with firms, member organizations, and all others in the IFAC network to address these points.

This effort will be easier if we are all in it together, which brings me to my next point. 

We must learn from each other.

Many organizations are publishing material about reporting and assurance services during the COVID-19 crisis. I commend ICAI for being a leader among them.

Your piece, “The Impact of Coronavirus on Financial Reporting and the Auditors Consideration,” for example, is a remarkably thorough and helpful document, both for its specific guidance to Indian professional accountants, and for its general comments on the impact of COVID-19 on reporting and assurance.

We have posted a link to that piece on IFAC’s dedicated COVID-19 resources page.

We have found thought guidance from all over our network, including many content hubs hosted by member organizations with an outstanding breadth and depth of information. We see that SMPs and their SME clients are especially vulnerable to the financial and practical consequences of this crisis. As the profession is rallying to provide solutions and guides to navigating this crisis, we aim to get this information to SMPs and SMEs that might need it.

We recently updated the site to include online CPD opportunities shared by our member organizations that are being made available to each other, including ICAI’s.

The World Bank and some large firms have cited this IFAC initiative as a valuable platform. The material we have curated is a true testament of the profession coming together for the common good and in the public interest.

I encourage everyone, especially SMPs, to visit our page, and to explore what the accountancy profession is seeing and saying during this crisis.

IFAC is working to facilitate the exchange of ideas. Thank you for being partners in that exchange.

I would like to emphasize that we can learn from each other’s best practices.

ICAI has led by example with its digitalization of member and student services. This digital transition will be crucial for all PAOs in the immediate future.

We must learn from each other and collaborate with each other to cope with this unprecedented situation and lead all efforts to ensure a better future.

IFAC as the global accountancy profession is in the best position to facilitate this collaboration across the world. The COVID-19 resources page is a good example.

Ladies and gentlemen, I would like to emphasize two things.

• The digitalization in our daily life will proceed at a much faster speed.
• The world will become even closer and more cooperative rather than separated and isolated through our collaborative efforts in coping with the coronavirus across the globe.

No one knows when this global health emergency will subside. But in the meantime, as professional accountants we must carry on and keep sight of our goals. Our work in the public interest is more important now than ever.

It has been a great pleasure to join your conference today. I would like to wish you well.

Thank you.

Investors, stakeholders, and society at large need to understand the value of companies beyond what they can glean from conventional financial reports – and this need is even more pressing during uncertain times such as the present.

IFAC today published its response to Accountancy Europe’s consultation, Interconnected Standard Setting for Corporate Reporting, which addresses the evolution of standard setting to enhance corporate reporting at the global level.

The current corporate reporting system needs to evolve quickly to deal with the challenge posed by a myriad of different jurisdictional requirements and an absence of widely agreed standards in various areas beyond financial reporting. The result is variable quality and lack of comparability, leading to greater cost and inefficient capital allocation for both companies and investors.

As indicated in the IFAC point-of-view on enhancing corporate reporting, a global solution is needed to achieve relevant, reliable, and comparable narrative information and metrics.

“The current reporting ecosystem does not best serve the interests of capital markets, companies or their stakeholders,” said IFAC CEO Kevin Dancey. “The options set out by Accountancy Europe to change the corporate reporting system are useful for furthering the dialogue toward a global and coherent solution. We look forward to continuing this conversation with key stakeholders.”

In its response to the consultation, IFAC endorsed six recommendations to secure an integrated global reporting structure. These include development of a global approach to international standard-setting, a conceptual framework for corporate reporting, and an oversight structure.

A global approach to these three elements— oversight, framework, and standards—is urgently needed in order to enhance corporate reporting.  While this is a challenging time for investors, companies and capital markets, the competition for capital will become more challenging, and the demand for relevant and candid information about organizations will be needed to reliably inform decisions about capital allocation and investor and other stakeholder’s assessments of long-term value creation.

Feedback on the consultation is due by April 30.  IFAC encourages stakeholders to contribute their views to this valuable consultation.

Good afternoon and good evening to the webinar participants from across the world. My name is Alan Johnson, Deputy President of IFAC, and it is an honour to be asked to make some closing remarks today.

I would firstly like to thank the Institute of Chartered Accountants of India President Atul Kumar Gupta, Vice President Nihar Jambusaria, our many presenters and audience participants. The Institute of Chartered Accountants of India is a very active and important member of IFAC, and it was a great initiative to hold this Covid-19 webinar today to discuss some very relevant matters in these challenging times.

I am especially pleased that Dr. In-Ki Joo, President of IFAC, and Tom Seidenstein, Chair of the International Audit & Assurance Standards Board were able to participate today.

I also thank the Indian and international speakers for taking time out on Easter Monday to share their views on the Impact of Covid-19 pandemic of reporting and assurance. We have heard from speakers from four continents, Asia, Australasia, Europe and North America, from colleagues in Korea, India, Indonesia, Sri Lanka, Malaysia, Myanmar, Dubai, Australia, Spain, Ireland, UK, Romania, USA and Canada.

The insights shared over these last three hours have been most interesting, and not least because of the diversity of geographic views.

This shows the convening power of our global profession, coming together at time of need, to share our views from our different and various perspectives. This is the power of a global profession, willing to step up in our role to always work in the public interest.

Today’s webinar made a few things very clear.

• Quality audit, and indeed the work of our profession generally, remains as important as ever to the healthy functioning of global capital markets and economies.
• Our work is as important to multinational industries as it is to small businesses and in turn to communities, families, and individuals.
• All of us are facing some of the same issues around the world, albeit it in different ways
•  We have an enormous opportunity and responsibility to avoid fragmented responses to our current situations.
•  And, the only way we can truly fulfill our mission of acting in the public interest is by acting in coordination, not as unique entities.

 I have been most impressed with the response so far from the profession to our current situation. I see us responding quickly and decisively, and I encourage us all to stay the path.

The challenges we all face from the Covid-19 crisis call upon our profession to do what we do best, which is to use our skills and expertise to advise and support governments, businesses both large and small, entrepreneurs, and members of society generally to plot the paths to recover from the serious impact of Covid-19 across the world.

It is clear that the world was not prepared for a pandemic of this nature. Our risk assessments did not anticipate this satisfactorily, and where they did the mitigations were clearly not sufficient. What we must do is take some learnings from the situation we find ourselves in and ensure that we are better prepared for global crises in future.

It is impossible to say how long the lockdowns will last, or indeed how much damage will be done to economies and livelihoods, and how long it will take to recover fully. But we do know that the damage is already significant across the world, and millions if not billions of people will be impacted significantly.

There are a few points I would like to make in concluding the webinar today.

1. First, our professional skills and counsel have never been more important. We need to help guide our governments, our businesses large and small, and indeed individual members of society in planning beyond the crisis to support a resumption of economic activity.

2. Second, we are also going to see public sector financial management become more important than ever before, as governments around the world are called on to support their citizens in unprecedented ways and often without the infrastructure or standards by which to so. Again, this represents not only an opportunity for the profession, but a very important responsibility.

We must continue to campaign for improvements in public sector financial management, including the adoption of International Public Sector Accounting Standards, to help governments have greater visibility of their resources and commitments and make decisions based on sound financial management to help them deliver better services to societies.

Facilitating effective management of public assets has always been part of the mission of the International Public Sector Accounting Standards Board, or IPSASB, and they work closely with governments and other stakeholders to help facilitate the practical implementation of their standards.

One thing clearly coming out of this crisis is that governments generally have not invested sufficiently in basic public services, partly because of a lack of resources or other political priorities.

We need to focus carefully on the question of what role our profession should play in helping to enhance public sector accountability, and ensuring that investments are made to strengthen public services everywhere in the world.

3. Finally, as we go forward, we need to focus on the learnings from this crisis, with respect to being prepared to manage global crises and our risk management processes need to be strengthened.

We have an important role to help strengthen risk management, both in terms of helping governments and businesses to plan and prepare for extreme risks that are rare in frequency but are significant in impact.

Before I conclude, I want to say that I am so glad that so many of us are able to be here today, albeit virtually, because it means we are healthy. At the same time I recognise how fortunate we are, and my thoughts go to all families across the world that have lost loved ones prematurely.

There is no question that the heroes of today and tomorrow and, quite frankly, the foreseeable future, are the doctors, nurses, healthcare workers, researchers, scientists—everyone who is working to save lives and helping to protect us. We owe them an enormous debt of gratitude, a debt that we may never ever be able to repay fully.

I am convinced that our global profession has never had such important role as now to support society in tackling this global challenge and helping governments and businesses navigate the path to recovery. Our professional competencies, a collection of technical knowledge and abilities, combined with our interpersonal behaviours, all underpinned by our ethical behaviour, are extremely relevant at this time. Never was more important our role as Trusted Advisors.

We need to continue to focus in earnest on the work that we do, which will be equally important on the other side of this terrible pandemic: as governments need the mechanisms to provide financial support to public health systems and citizens; as economies start to recover; as businesses need cash flow to rebuild….we have to be there as partners and problem solvers with them.

I have enjoyed following this webinar today, and I am proud that I am a member of a global profession that does so much good in society to make the world a better place.

My thanks again to all the speakers, to all participants from around India and many other countries around the world. I do hope that we will be able to get through this crisis soon.

Covid-19 has shown us that global pandemics do not discriminate and we are all impacted, some obviously worse than others, irrespective of our positions in society.

I also hope that looking forward we will find ourselves in a world that is fairer, kinder and more compassionate.

Keep safe and stay well!!

Thank you.

IFAC responds to Accountancy Europe's consultation on Interconnected Standard Setting for Corporate Reporting. The consultation examines how to harmonize non-financial information reporting and its interconnectedness with financial reporting.  

IFAC today released the latest installment of its Exploring the IESBA Code educational series: The Conceptual Framework–Step 3, Addressing Threats.

Exploring the IESBA Code is a twelve-month series providing an in-depth look at the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). Each installment focuses on a specific aspect of the Code using real-world situations in a manner that is relatable and practical. Readers will gain a better understanding of the thought process behind important aspects of the Code through storytelling and expert analysis from professionals involved in developing the standards.

Previous installments of Exploring the IESBA Code looked at the Code’s five fundamental principles and key aspects of the conceptual framework, which is a specified approach that all professional accountants are required to use to identify, evaluate and address threats to compliance with those principles. Installment four focuses on addressing threats.

A professional accountant can often come across complex or challenging situations that are not black and white. These challenging situations require ethical considerations, some of which are expressly dealt with in the Code. This  unique and informational series was developed by IFAC in collaboration with the International Ethics Standards Board for Accountants (IESBA) to help explain how the Code assists in navigating some of these challenges.

To read and download this and future installments, visit the IFAC website.

Exploring the IESBA Code was published by IFAC and does not form part of the Code. It is non-authoritative and is not a substitute for reading the Code.

For more information about the Code, please click here. 

This is the fourth installment of a 12-month publication series titled Exploring the IESBA Code.

This fourth installment highlights key aspects of the Code’s Conceptual Framework which is an approach that all professional accountants are required to apply to comply with the five principles. The installment focuses on addressing threats.

For more information about the Code, click here.

This is the third installment of a 12-month publication series titled Exploring the IESBA Code.

This third installment highlights key aspects of the Code’s Conceptual Framework which is an approach that all professional accountants are required to apply to comply with the five principles. The installment focuses on evaluating threats and the concept of the reasonable third party test.