Good morning. It's wonderful to be in Bratislava. I would like to congratulate you on the 15th Anniversary of the Slovak Chamber of Auditors, and I bring warm greetings and affection from the entire IFAC family that joins you today in this celebration.

I thank you very much for this invitation, which has allowed me, among many other things, to visit for the first time, the country where my mother was born. I must confess that I regret that it took me so long to get here, and therefore, appreciate this invitation very much.

I can honestly tell you that I feel a strong connection with this country, and I am sure that the bond will become stronger in the days to come.

For 30 years, IFAC's mission has been to work in the public interest to strengthen the worldwide accountancy profession by establishing and promoting adherence to high quality professional standards, furthering the convergence of those standards, and speaking as the voice of the profession on relevant public policy issues.

Good afternoon and thank you for inviting me to join the 75th anniversary celebration of the Chamber of Hungarian Auditors (CHA).  Congratulations on this wonderful occasion.
 
It is significant that we are marking this 75th anniversary on October 24th; one day after the Hungarian National holiday that celebrates the freedom fighters of the Hungarian Revolution of 1956. The accounting professional organization, established in 1932, has faced the challenges of operating during wartime, pushing ahead in the face of hostile political regimes and staying the course in times of great economic upheaval. Facing adversity, surviving, and thriving are testimony to the spirit of the people in this room, as well as the rest of the Hungarian people.

But Hungarians are known for more than just an enduring spirit.  Hungarians are known for a tradition of innovation.  Famous Hungarian inventors and their inventions include: John von Neumann and digital computing; Laszlo Biro and the ball point pen; and Erno Rubik and his Rubik’s cube. Such inventions require vision and a belief that the world needs what you have got to offer, which brings us to our topic this afternoon.

A new publication released by the International Federation of Accountants (IFAC) addresses a wide range of topics that can assist professional accountants in business with their management, strategic and financial decision making. The publication, 2007 Articles of Merit, includes 10 previously published international articles that were selected by IFAC's Professional Accountants in Business (PAIB) Committee as part of its annual Articles of Merit Award Program for Distinguished Contribution to the roles and domain of professional accountants in business.A new publication released by the International Federation of Accountants (IFAC) addresses a wide range of topics that can assist professional accountants in business with their management, strategic and financial decision making. The publication, 2007 Articles of Merit, includes 10 previously published international articles that were selected by IFAC's Professional Accountants in Business (PAIB) Committee as part of its annual Articles of Merit Award Program for Distinguished Contribution to the roles and domain of professional accountants in business.

The winning article for 2007 is "Finding the Right Mix: How to Match Strategy and Management Practices to Enhance Firm Performance" by Kip R. Krumwiede and Shannon L. Charles. It was first published in the Institute of Management Accountants' monthly magazine, Strategic Finance. The authors' investigation into the use and adoption of popular management practices finds that highly rated practices such as target costing, the balanced scorecard, and activity-based costing have had relatively low adoption. However, their research identified that those organizations that did adopt these practices found that they produce valuable results. Using this research as a basis, the article suggests a five-step process to facilitate the matching of management practices to organizational strategy.

Other articles of outstanding merit cover topics such as key performance indicators, the art of management accounting, evaluating the return on information technology investments, XBRL, environmental management accounting, and board processes.

The 2007 Articles of Merit, together with past issues, can be downloaded from the IFAC online bookstore (www.ifac.org/store). The 10 articles in the 2007 publication can also be downloaded individually from the IFAC bookstore.

Founded in 1977, 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 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. The organization, through its independent standard-setting boards, sets international ethics, auditing and assurance, education, and public sector accounting standards. Through its Professional Accountants in Business Committee, IFAC issues guidance to encourage high quality performance by professional accountants in business.

At its most recent meeting in Madrid, Spain in September, the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), approved two sets of new proposals. The first exposure draft addresses concerns about the use and reliability of external confirmations as audit evidence. External confirmations are written responses to the auditor from a third party. The second exposure draft proposes stricter requirements when an auditor uses an expert to obtain audit evidence.

"The proposed standards represent significant steps by the IAASB designed to enhance auditor performance in important areas of the audit of financial statements. Confirmations have sometimes proved to be less reliable than expected and the proposals are intended to assist in making them effective when an auditor decides to use them. In a more complex world, especially where fair values feature in financial reporting, the auditor may have more need of the assistance of experts in other disciplines for the purposes of the audit. The new proposals are therefore timely," explains John Kellas, IAASB Chairman.

These proposed International Standards on Auditing (ISAs) are drafted in accordance with the IAASB's new conventions designed to improve the clarity of its pronouncements. They may be viewed by going to http://www.ifac.org/eds.  

External Confirmations
Recent experience has indicated that external confirmations may not always be as reliable as expected as audit evidence, giving rise to requests for more rigorous requirements governing the auditor's use of external confirmations. The auditor's decision about whether to use external confirmation procedures is based upon the identification and assessment of risks of material misstatement in accordance with other ISAs. Proposed ISA 505 (Revised and Redrafted), External Confirmations, is directed at the effective performance of external confirmation procedures when the auditor determines that such procedures are an appropriate response to an assessed risk of material misstatement.

Use of the Work of an Auditor's Expert
Proposed ISA 620 (Revised and Redrafted), Using the Work of an Auditor's Expert, deals with the auditor's use of the work of a person or organization possessing expertise in a field other than accounting or auditing, employed or engaged by the auditor to assist the auditor to obtain sufficient appropriate audit evidence. It places particular emphasis on the need for the auditor to evaluate the expert's objectivity, and to establish a proper understanding with the expert of the expert's responsibilities for the purposes of the audit.

How to Comment
Comments on the exposure drafts are requested by February 15, 2008. Comments should be submitted by email to EDComments@ifac.org. They may also be faxed to IAASB ED Comments at +1-212-286-9570 or mailed to IAASB ED Comments at 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on the IFAC website.

About the IAASB and IFAC
The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board oversees the activities of the IAASB and, as one element of that oversight, establishes its due process and working procedures.

Founded in 1977, 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 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business.

Further information about IAASB may be obtained from its website: http://www.iaasb.org. The PIOB website address is http://www.ipiob.org.

Good morning. I'm delighted to be here. Thank you, Eric, for inviting me to join you at the firm's international symposium. It is particularly gratifying to me to meet with you in my country. I hope you have a wonderful stay in Buenos Aires.

You have asked me to talk about IFAC's mission and how it affects global audit networks. I will gladly do that and then take your questions.

IFAC has a history of collaboration with the international networks firms such as PKF.

I want to thank PKF partners and associates for their support of IFAC's work. I would also like to personally extend a word of thanks to Theo Vermaak, PKF's representative on IFAC's Transnational Auditors Committee (TAC), for bringing his valuable practical experience to that committee. The TAC is an IFAC committee, but at the same time is the executive arm of the Forum of Firms.

As you probably know, PKF together with 22 other accounting networks involved in multinational audits, participate in IFAC chiefly through the Forum of Firms. The Forum was established six years ago to address criticisms and concerns expressed by international stakeholders with regard to the use of international standards and consistent audit performance among international auditing network firms.

Upon joining the Forum, the networks made a major commitment to IFAC standards and other quality measures.

Thank-you Mr. Chairman. Good morning ladies and gentlemen.
 
Before I start I would just like to say what a privilege and a pleasure it is for me to be able to participate on this panel. I wish to share with you today the significant points that IFAC is likely to make in the comment letter to the IASB. I will also outline some of the key findings from a micro-entity financial reporting research project. And finally I will spend a few minutes on assurance services for SMEs.
 
Let me frame my comments with some observations. In the recent past, issues impacting small- and medium-sized entities (SMEs) and small-and medium-sized practices (SMPs) have rose to the top of the agenda - of the regulators, professional accountancy bodies, standard setters, and IFAC. The IASB’s project to develop an SME accounting standard is testimony to this. It seems the main spur for this emphasis on SME/SMP is concern over regulatory overload, overload that is stifling the ability of small business to innovate, grow and compete. This regulation, including standards of accounting, auditing, and ethics, was often tailored to suit large business. It’s no surprise it is ill fitting for small business. The standards sometimes lack relevance to SME/SMP. And SME/SMP often lack the capacity to efficiently implement and comply with them.

Ladies and gentlemen, I'm honored to be here in Osaka speaking to you on the 50th anniversary of the CAPA conference. Much has happened at CAPA since the meeting of the First Far East Conference of Accountants half a century ago in the Philippines, attended by your twelve founding members. Today, CAPA is a large and very important regional accountancy organization, and its geographical area encompasses half the globe. As many of you know, IFAC is celebrating an anniversary this year too: our 30th. The progress that IFAC and the accountancy profession have been able to achieve was made possible through the cooperation of members and regional accountancy organizations such as CAPA.

Good morning ladies and gentleman. It is a pleasure to be here in Osaka, this beautiful city that was once the imperial capital of Japan. I would like to thank his Imperial Highness Crown Prince Naruhito for welcoming us all to his country.

Osaka is a very fitting place to host the 17th conference of the Confederation of Asian and Pacific Accountants. In ancient times, this city served as the gateway to Japan for foreign visitors and envoys from across Asia. Today, Osaka once again welcomes visitors from across the Asia-Pacific region with open arms.

CAPA continues to play an integral role in the development of the accountancy profession in this region, which is in the midst of one of the greatest economic expansions in human history. Now more than ever, professional accountants in this region are essential to the long-term sustainability of this growth through their work within business and industry, in public practice, and in government service. As the organization for the profession in this region, CAPA must continue to support high quality work by all members of the profession, as it has done for so long.

New requirements designed to enhance the quality of audits of group financial statements were released today by the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC). International Standard on Auditing (ISA) 600 (Revised and Redrafted), Special Considerations - The Audit of Group Financial Statement (Including the Work of Component Auditors), assists the group engagement partner in taking responsibility for the direction, supervision and performance of the group audit and the issue of an auditor's report that is appropriate in the circumstances.

To assist the group engagement team to obtain sufficient appropriate audit evidence on which to base the group audit opinion, the ISA specifies the types of work that the group engagement team, or component auditors on its behalf, should perform on the financial information of significant components. It also requires the group engagement team to be appropriately involved in the work that component auditors perform. The ISA is effective for audits of financial periods commencing on or after December 15, 2009. This date is consistent with the effective date for all the standards being redrafted under the IAASB's Clarity project.

The ISA, which was developed over a period of five years, was influenced by the responses to three exposure drafts. The new ISA takes account of regulatory and standard-setting developments around the world, the interests of small entities, and the expectations of various stakeholders, including those represented on the IAASB Consultative Advisory Group.

John Kellas, Chairman of the IAASB, explains: "The new standard clearly explains the responsibility of the group engagement partner to direct and control the group audit, even when component auditors may be involved. It responds to public expectations for continuous improvement in auditing standards. The project has not been an easy one, but we are confident that the standard will enhance current practice and promote consistency worldwide."

ISA 600 (Revised and Redrafted) can be downloaded free-of-charge from the IFAC online bookstore at http://www.ifac.org/store.

About the IAASB and IFAC

The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board oversees the activities of the IAASB and, as one element of that oversight, establishes its due process and working procedures. Founded in 1977, 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 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business. Further information about IAASB may be obtained from its website: http://www.iaasb.org.

The PIOB website address is http://www.ipiob.org.

The International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board under the auspices of the International Federation of Accountants (IFAC), has determined that its complete set of clarified International Standards on Auditing (ISAs) will be effective for audits of financial statements for periods beginning on or after December 15, 2009. In announcing the definitive date, the IAASB hopes to eliminate uncertainty about when the new standards will apply. This will allow standard setters, regulators and auditors to plan for the adoption and implementation of the standards.

“In setting the date, we have balanced the desire to benefit from improvements in the standards as soon as practicable against the necessity for implementation to be effective. The date may seem a long way off, but there is much to be done to ensure that implementation is smooth. This is clearly understood by auditors and others who have asked us to allow a reasonable time for implementation. We have listened to their concerns and have done so,” explains John Kellas, IAASB Chairman. Mr. Kellas continued, “We are making the final standards available as soon as they have been approved by IAASB and, in respect of appropriate due process, by the Public Interest Oversight Board. This is intended to allow all concerned to take such steps as are necessary for effective implementation, including national adoption, translation, amendment of manuals and processes and training. I urge everyone to take advantage of the time available for implementation to ensure that it is a success.”

The IAASB continues to advance the clarification of its auditing standards and is on track to complete its Clarity project by the end of 2008 as planned. For more information about the IAASB’s Clarity project and its timetable, see the October 2007 communiqué, Effective Date for IAASB’s Clarified International Standards on Auditing, which is posted on the IAASB website.

About the IAASB and IFAC The objective of the IAASB is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The Public Interest Oversight Board oversees the activities of the IAASB and, as one element of that oversight, establishes its due process and working procedures.

Founded in 1977, 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 155 members and associates in 118 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC, through its independent standard-setting boards, sets international ethics, education, and public sector accounting standards. It also issues guidance to encourage high quality performance by professional accountants in business. Further information about IAASB may be obtained from its website: http://www.iaasb.org. The PIOB website address is http://www.ipiob.org.