Key findings from the IFAC 2010 Fourth Annual Global Leadership Survey cover a range of topics including IFAC's role in implementation of global standards, transitioning to ISAs, sustainability, ethics, the needs of SMEs and SMPs, credibility of the profession, and the demand for professional accountants.

Profession Urges International Federation of Accountants to Increase Role in These Areas

Credibility of the profession, standard setting, and adoption and implementation are key areas of focus for leaders in the accountancy profession, according to results of the 2010 IFAC Global Leadership Survey of the Accounting Profession, released today by the International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 125 countries.

“In our fourth annual survey, there was extremely strong confirmation among survey participants that IFAC should continue in its pivotal role as an international standard setter,” said Ian Ball, chief executive officer of IFAC. “In addition, respondents asked us to continue to work toward convergence and the adoption of international standards, and proactively support and restore public confidence in the accountancy profession.”

IFAC’s Role in Implementation of Global Standards is Crucial
The accountancy profession feels that transitioning to International Standards on Auditing (ISAs) is a crucial issue—96 percent of survey respondents cited this as very important or important, compared with 83 percent last year. There was also universal sentiment that IFAC, as a representative of the global accountancy profession, has a key role to play in convergence and leading the way in the global adoption and implementation of standards.

Virtually all survey participants (98-99 percent) said that IFAC plays a very important or important role relating to confidence in, and adoption of, high-quality international standards. In addition, 97 percent of respondents said that recognition of IFAC as the umbrella organization for international standards in the areas of auditing and assurance, education, ethics, and public sector financial reporting is very important or important. The vast majority of survey participants said IFAC should continue to work toward convergence and effective implementation of international standards. To encourage implementation, 91 percent of those surveyed said that developing guidance regarding international standards and corporate governance principles is very important or important.

Sustainability and SMPs Take Center Stage
Sustainability emerged as a key issue as well, with 91 percent saying that progressing corporate social responsibility, including sustainability, is important, compared to 82 percent last year. In addition, 95 percent of respondents said that addressing the needs of SMEs and SMPs is crucial.

Global Code of Ethics Needed
The importance of ethics also was cited—auditor independence and agreeing/discussing expectations to prevent and detect fraud were cited by 91 percent and 89 percent of respondents, respectively. The survey also confirmed the widespread opinion that there is a clear need to have a global code of ethics to protect the fundamental qualities of the profession, particularly relating to independence. According to participants, the code needs to take local culture into account, and needs to be effectively enforced.

Demand for Professional Accountants Continues to Grow
Significant demand is seen across various sectors, particularly in public practice, with approximately three-quarters of respondents saying that demand is very high or high in public practice-accounting/advisory/tax/other (78 percent) and public practice-auditing/assurance (71 percent). These results compare positively to our 2009 survey, in which 77 percent and 65 percent, respectively, of respondents cited very high or high demand in these areas. Those surveyed said that the accountancy profession continues to be attractive due to career options, ability to work internationally, and earning potential.

About the Survey
The 2010 IFAC Global Leadership Survey on the Accountancy Profession asked officers (generally presidents and chief executive officers) from IFAC’s member bodies, associates, affiliates, and regional accountancy organizations and groupings a variety of questions regarding the accountancy profession. Survey results include data from 123 respondents who took the survey from January 10, 2011 to February 15, 2011.

About IFAC
IFAC (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The PAIB Committee's survey on risk management and internal control received over 600 responses from around the globe. This information paper provides an analysis of the survey results and summarizes respondents' recommendations for the next steps in this area.

Risk management and internal control frameworks, standards, and/or guidance should be aligned internationally, according to the results of the Risk Management and Internal Control Survey released by the IFAC Professional Accountants in Business (PAIB) Committee. With over 600 responses from around the globe and from all types of organizations, the survey results also highlighted that:

• risk management and internal control systems should be better integrated into the governance, strategy, and operations of organizations; and
• risk management and internal control guidelines should be combined into a set of integrated guidelines, as both elements are integral parts of an effective governance framework.

As many organizations have international activities, further international alignment of risk management and internal control guidelines would benefit their operations and compliance processes, reducing costs and allowing for the comparison of these systems across borders and, thus, increasing investor confidence.

Recommended Next Steps
Respondents recommend that national and international standard-setting bodies and professional associations, as well as the relevant regulators, collaborate to (a) determine the major similarities and differences between the various guidelines, (b) compile leading risk management and internal control practices, and (c) consider the benefits of further integration and international alignment of regulations and guidelines in the area of governance, risk management, and internal control. Respondents would like to see these discussions lead to the establishment of an international, integrated framework. To further international alignment, existing national guidelines could be expanded or modified—with allowances made for specific national circumstances—to meet the principles of an international framework.

The survey analysis, Global Survey on Risk Management and Internal Control—Results, Analysis, and Proposed Next Steps, is available at http://www.ifac.org/publications-resources/global-survey-risk-management-and-internal-control.

About the PAIB Committee
The PAIB Committee (www.ifac.org/paib) serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, financial services, the public sector, education, and the not-for-profit sector. Its aim is to promote and contribute to the value of professional accountants in business by increasing awareness of the important roles professional accountants play, supporting member bodies in enhancing the competence of their members, and facilitating the communication and sharing of good practices and ideas.

About IFAC
IFAC (www.ifac.org) 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. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The Professional Accountancy Organization (PAO) Development Committee of the International Federation of Accountants (IFAC) has issued a revised edition of its Good Practice Guide, Establishing and Developing a Professional Accountancy Body (the Guide), which was first released in 2005 and updated in 2007 to support professional accountancy organizations in expanding and strengthening their role and responsibilities in representing the accountancy profession.

The structure of the Guide, enhanced and simplified from the original version, is now organized in two sections: Establishing and Developing a Professional Accountancy Body, which covers the roles and responsibilities of a professional accountancy organization, education and examinations, and capacity development; and Tools and Resources to Support the Development of the Accounting Profession, which includes new case studies, practical illustrations, and supplementary guidance.

PAO Development Committee Chairwoman Deborah Williams noted, “Building on the hard work undertaken by the former Developing Nations Committee, we are very pleased to release a completely revised and updated Good Practice Guide as our first PAO Development Committee publication, which was written in response to demand from the developing profession. Strengthening professional accountancy organizations is an essential element of developing financial infrastructures, which in turn assists in achieving financial stability. Our committee and the guidance it provides helps newer professional accountancy organizations, and all of their development partners, along the path to building an effective, sustainable profession.”

The Guide should be a valuable resource for individuals and organizations involved in building the capacity of the accountancy profession, IFAC members and associates seeking further development, and other organizations involved in the regulation of accounting and auditing activities. While primarily aimed at building the capacity of the profession in emerging countries, the guide will also be useful for more developed professional accountancy organizations considering revisions to governance structures, the development of education programs, and the adoption and implementation of international standards.

This revised edition includes the following additions:

• Further guidance on enhancing public sector focus
• Expanded information about the IFAC Statements of Membership Obligations (SMOs)
• Sample Action Plans on quality assurance, and adoption and implementation of international standards
• Guidance on strengthening governance

In addition, the guide was developed in the English language with plans for translation into Arabic, French, Russian, and Spanish by December 2011.

Establishing and Developing a Professional Accountancy Body can be downloaded free of charge from the IFAC website.

About IFAC
IFAC (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The effects of the financial crisis continue to be felt by small businesses, according to the small- and medium-sized accountancy practitioners recently polled by the International Federation of Accountants. Economic uncertainty is still the biggest challenge facing small- and medium-sized entities (SMEs), said the largest group of respondents—nearly 30%—while the burden of regulation was a close second. Regulations and standards challenge small- and medium-sized accounting practices (SMPs) as well: over 40% said that keeping up with regulations and standards is the most important issue now facing their practice.

Despite the prevalence of economic uncertainty, nearly 40% of SMPs expect their practices to perform better this year than last year. Only slightly more (43%) expect business to be even with 2010, and 19% expect business to shrink in 2011.

SMPs continue to generate the largest proportion of their revenue from traditional compliance-based services. Nearly 45% of respondents indicated that audit and assurance is their biggest source of revenue, followed closely by accounting and compilation (40%). Tax and advisory/consulting services comprised only 15% combined.

With the aim of taking a snapshot of the key issues confronted by SMPs and their SME clients, the IFAC SMP Quick Poll will be issued quarterly throughout 2011 in the SMP eNews, IFAC’s free newsletter for SMPs. The first Quick Poll collected 425 responses from all regions of the world over a 14-day period (January 27, 2011 to February 9, 2011). To subscribe to the SMP eNews, and participate in our next poll, sign up here.

IFAC wishes to thank those member bodies and regional organizations that published the poll in their newsletters, or otherwise helped promote it. The full survey results are available here.

About IFAC
IFAC (www.ifac.org) 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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

To support professional accountancy organizations in expanding and strengthening their role and responsibilities in representing the accountancy profession, the PAO Development Committee Good Practice Guide Part 1, Establishing and Developing a Professional Accountancy Body which covers the roles and responsibilities of a professional accountancy organization, education and examinations, and capacity development; and Good Practice Guide Part 2, Tools and Resources to Support the Development of the Accounting Profession, which includes new case studies, practical illustrati