The SMP Advisory Group (SMPAG) is pleased to respond to the IESBA Exposure Draft Proposed Technology-Related Revisions to the Code (ED).

Functional and information silos within organizations are barriers to delivering high-quality sustainability-related information, which is necessary for decision making and trustworthy corporate reporting. Boards and CEOs are turning to CFOs and finance functions to break down these silos and to drive connectivity between sustainability and financial information and processes, thereby creating a critically important “integrated mindset.” 

At its core, an integrated mindset is about improving the quality of sustainability information and processes and connecting these to financial reporting and the value of the business. This leads to better decision making and communication with stakeholders, and consequently to reduced risk and cost of capital, as well as growth opportunities.

The CFO and finance function are essential facilitators of an integrated mindset given their expertise in connecting and prioritizing information—both financial and sustainability-related—into a more integrated corporate reporting process that provides an accurate picture of performance and value creation to the organization, its investors, and other stakeholders.

Business held its position as the most trusted institution in the 2022 Edelman Trust Barometer, which indicated an enormous need for business to continue delivering tangible action and results on society’s most critical issues. IFAC believes that trustworthy, comprehensive corporate reporting is critical to delivering on this need and driving long term value creation and trust.

“Sustainable value creation will not result from siloed thinking and information,” said Kevin Dancey, IFAC CEO. “Enabling management and boards to make informed decisions and deliver decision-useful disclosure for investors requires breaking down functional silos and connecting information on sustainability, value creation, and financial performance. Professional accountants are poised to deliver this integrated mindset, and we're calling on all businesses to take action.”  

IFAC’s call-to-action, Championing an Integrated Mindset to Drive Sustainable Value Creation, highlights what it means to adopt an integrated mindset, why it is important and how it is achieved.  

About IFAC

The International Federation of Accountants (IFAC) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Comprised of 180 members and associates in more than 130 countries and jurisdictions, IFAC represents more than 3 million accountants in public practice, education, government service, industry and commerce.

Over four decades, IFAC has represented the global profession and supported the development, adoption, and implementation of international standards that underpin the contributions of today’s global accountancy profession. IFAC has maintained a long-term approach to building and strengthening a global accountancy profession that supports transparent, accountable, and sustainable organizations, financial markets, and economies.

To deliver useful information for internal decision-making, as well as for comprehensive, trustworthy corporate reporting, businesses can break down functional and information silos with an integrated mindset, bringing together information from corporate functions and external sources about sustainability impacts and related opportunities and risks that are relevant to the value creation process.

USAID (United States Agency for International Development) has joined the International Federation of Accountants (IFAC); The Global Fund to Fight AIDS, Tuberculosis and Malaria; and Gavi, the Vaccine Alliance, in signing a Memorandum of Understanding (MOU) to support in-country financial management. The agreement supports programming for local accountancy and finance professionals and efforts to improve financial transparency, accountability, and anti-corruption efforts in the public health sector.

The MOU supports continued donor collaboration, the importance of which was emphasized during the COVID-19 pandemic, and the need for accountability and transparency on the use and stewardship of funds. The partnership between IFAC, USAID, The Global Fund, and Gavi demonstrates a shared commitment to strengthening public financial management globally. Through this agreement, USAID, IFAC, the Global Fund, and Gavi seek to strengthen accountancy and financial professionals’ expertise and help close the gaps in accountancy skills in implementing countries, which can impact the reliability and effectiveness of managing and disbursing funds. The MOU builds on a 2011 agreement and aims to optimize the joint efforts of global partners to maximize the performance of investments and support the sustainability of health programs.

Ultimately, this partnership will help improve the integration of donor investments into country systems, strengthen internal controls to reduce fiduciary and financial risks, enhance absorption of grants, and produce greater impact.

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

About USAID
USAID is the world's premier international development agency and a catalytic actor driving development results. USAID's work advances U.S. national security and economic prosperity, demonstrates American generosity, and promotes a path to recipient self-reliance and resilience. USAID’s global health efforts include investments in HIV, Malaria, Tuberculosis, Maternal and Child Health, Family Planning, Nutrition, other infectious diseases, and health systems strengthening. 

About Gavi, the Vaccine Alliance
Gavi, the Vaccine Alliance is a public-private partnership that helps vaccinate half the world’s children against some of the world’s deadliest diseases. Since its inception in 2000, Gavi has helped to immunise a whole generation – over 822 million children – and prevented more than 14 million deaths, helping to halve child mortality in 73 lower-income countries. Gavi also plays a key role in improving global health security by supporting health systems as well as funding global stockpiles for Ebola, cholera, meningitis and yellow fever vaccines. After two decades of progress, Gavi is now focused on protecting the next generation and reaching the unvaccinated children still being left behind, employing innovative finance and the latest technology – from drones to biometrics – to save millions more lives, prevent outbreaks before they can spread and help countries on the road to self-sufficiency. Learn more at www.gavi.org and connect with us on Facebook and Twitter.

The Vaccine Alliance brings together developing country and donor governments, the World Health Organization, UNICEF, the World Bank, the vaccine industry, technical agencies, civil society, the Bill & Melinda Gates Foundation and other private sector partners. View the full list of donor governments and other leading organizations that fund Gavi’s work here.

About the Global Fund to Fight AIDS, Tuberculosis and Malaria
The Global Fund is a worldwide movement to defeat HIV, TB and malaria and ensure a healthier, safer, more equitable future for all. We raise and invest US$4billion a year to fight the deadliest infectious diseases, challenge the injustice which fuels them and strengthen health systems in more than 100 of the hardest hit countries. We unite world leaders, communities, civil society, health workers and the private sector to find solutions that have the most impact, and we take them to scale worldwide. Since 2002, the Global Fund has saved 38 million lives.

At its March 2022 virtual meeting, IFAC’s Professional Accountants in Business Advisory Group considered the key global trends impacting the accountancy profession.

Countries around the world are searching for ways to shift capital investments into activities that support the transition to a more sustainable, low-carbon economy. To finance that massive change, investors and regulators are looking to the sustainable debt market as an important vehicle in raising funds to finance projects that advance environmental, social and governance (ESG) objectives.

The International Federation of Accountants (IFAC) works with our valued member organizations, network partners, and others to facilitate the translation of content, including standards and supporting materials from the standard-setting boards, IAASB, IESBA, and IPSASB, in almost 50 languages. In 2021, with the help of 36 different organizations, we developed 159 translations in 24 different languages.

The IFAC SMP Advisory Group (SMPAG) is pleased to respond to the IESBA Exposure Draft on Proposed Revisions to the Code Relating to the Definition of Engagement Team and Group Audits.

Integrated reporting has been adopted as a market-led initiative by thousands of private and public sector organizations around the world to help them understand and communicate their value creation and performance to investors and other stakeholders.

To enhance trust in integrated corporate reporting, boards need to oversee the integrity of the integrated report and underlying reporting process. To help them, IFAC has worked in partnership with the Institute of Internal Auditors (IIA) to develop Executing the Board’s Governance Responsibility for Integrated Reporting—the second installment in IFAC’s integrated reporting assurance series. It highlights how boards execute their accountability responsibility for integrated reporting and integrated reports with the coordination of all lines of governance and the support of internal auditors.

Board responsibility statements incorporate multiple internal assurance activities across all lines of governance and management and support the integrity of the integrated report and the underlying processes, systems, and information. This installment highlights the concepts and tools needed to deliver such statements. These can also be applied to regulated forms of management commentary in many parts of the world, including management discussion and analysis, strategic report, operating and financial review or the Task Force on Climate-Related Financial Disclosures.

“The IFRS Foundation’s announcement on the future of integrated reporting and the International Integrated Reporting <IR> Framework confirms that the International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB) will assume responsibility for the <IR> Framework from July,” said Kevin Dancey, IFAC CEO. “Within the IFRS Foundation, the Framework will be further developed to help companies prepare an integrated report and support connectivity between the reporting required by the IASB and the ISSB. This installment of IFAC’s integrated reporting assurance series shows how directors can deliver confidence in integrated reporting through coordinated and connected internal and external assurance activities.”

“As an integral component of effective organizational governance, internal audit plays a critical role in instilling trust and confidence in the completeness, accuracy, and reliability of the information that forms the basis of the organization’s integrated report,” said Anthony Pugliese, CIA, CPA, CGMA, CITP, president and CEO of The IIA. “As noted in the widely accepted Three Lines Model, internal audit provides objective assurance, independent from management, of internal controls critical to achieving organizational objectives, including objectives related to integrated thinking and reporting.”

Access Executing the Board’s Governance Responsibility for Integrated Reporting. 

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

About The IIA
Established in 1941, The Institute of Internal Auditors (IIA) is an international professional association with global headquarters in Lake Mary, Florida, USA. The IIA is the internal audit profession's global voice, recognized authority, acknowledged leader, chief advocate, and principal educator. Generally, members work in internal auditing, risk management, governance, internal control, information technology audit, education, and security.