To promote awareness and understanding of the newly clarified1 International Standards on Auditing (ISAs), the International Auditing and Assurance Standards Board (IAASB) released today a series of "ISA Modules" focusing on some of the new and more significantly revised ISAs. Developed by IAASB staff, each of these modules combines short video presentations and accompanying slides that explain the key principles of, and major changes in, individual ISAs, including the implications for audits of small- and medium-sized entities (SMEs).

"Promoting the adoption and successful implementation of ISAs is one of the IAASB's most important goals. These new tools will help us to move closer to that goal by providing support to those responsible for adopting and implementing the clarified ISAs, trainers, and auditors in applying them in practice," explains Arnold Schilder, Chairman of the IAASB.

This new resource includes modules that provide an introduction to, and an overview of, the clarified ISAs, including ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing, and audit documentation and SME audit considerations. Additional modules cover ISAs that address related parties, auditing accounting estimates, including fair value estimates, communication with those charged with governance, and communicating deficiencies in internal control.

"Now is the time to address the necessary aspects of implementation. This includes developing or updating training programs and considering audit methodology changes," emphasizes IAASB Technical Director James Gunn, adding, "Successful implementation of the clarified ISAs will depend on being well prepared when they come into effect."

The ISA Modules are available to download free of charge from the IAASB Clarity Center on the IFAC website (web.ifac.org/clarity-center/support-and-guidance). The IAASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to their members and employees.  

About the IAASB and IFAC
The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance.

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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

¹ The Clarity Project, completed by the IAASB in March 2009 resulted in the issuance of 36 ISAs and one International Standard on Quality Control in a new style that is easier to understand, translate, and implement. In some cases, other major revisions to the content were made as well. The new set of clarified ISAs goes into effect for audits of financial statements for periods beginning on or after December 15, 2009. In practical terms, this means that they will be effective for 2010 year end audits.

The International Federation of Accountants (IFAC) supports the goals expressed by G-20 Leaders at the Pittsburgh Summit last week to advance "a framework for strong, sustainable, and balanced growth," which includes reform of executive compensation packages,  the adoption of a single set of high-quality global accounting standards, and increased resources for the World Bank and international development banks. IFAC recommends that these goals remain priorities and that G-20 Leaders act on them at a national level.

Two issues at the top of IFAC's agenda, which were reflected in its submission to the G-20 finance ministers in July, are the need for governments to address corporate governance issues and to move ahead on implementing common global standards not only for accounting, but also for auditing and for auditor independence.

"IFAC shares the G-20's view that systems of remuneration should provide incentives consistent with long-term growth and corporate performance," emphasizes Robert Bunting, IFAC President, adding, "The time has come to act on that view."

IFAC has recommended that the G-20 nations adopt and implement the Organisation for Economic Co-operation and Development's (OECD's) Principles of Corporate Governance and that they ask the OECD to address the design of remuneration systems within its corporate governance framework. In addition, IFAC has strongly urged governments to support an increased role for corporate audit and compensation committees and for ensuring that members of these committees have the appropriate expertise.

As part of its governance recommendations, IFAC has called for "competency requirements for those preparing financial statements." IFAC believes these competency requirements should apply not only to those working in listed companies, but also to those preparing governmental financial reports. This is especially critical as governments assume new forms of assets and liabilities as a result of their bailouts and stimulus plans. Greater transparency by governments, made possible through high-quality financial reporting, will help keep taxpayers informed and boost investor confidence.

"Governments can make major strides in enhancing their fiscal management and strengthening their financial reporting by adopting and implementing International Public Sector Accounting Standards (IPSASs)," emphasizes IFAC Chief Executive Officer Ian Ball. "Additionally, the adoption and consistent application of IPSASs will facilitate more reliable cross-national financial comparisons."

In addition to supporting global adoption of IPSASs, IFAC has long advocated the adoption of International Financial Reporting Standards and International Standards on Auditing. Global standards will create a level playing field in the interpretation and exchange of financial information and contribute to economic and financial stability. Similarly, the adoption of global standards on auditor independence, such as those expressed in the Code of Ethics for Professional Accountants, will help to sustain trust in capital markets.    

IFAC also recognizes the key role the World Bank plays in helping to achieve more balanced economic growth and applauds the G-20 nations for their commitment to it. IFAC continues to work closely with the World Bank to develop and strengthen the accountancy profession, particularly in emerging countries. A strong accountancy profession, supported by high-quality, robust standards, is a vital component of a country's financial system.

To view IFAC's recommendations to the G-20, go to www.ifac.org/financial-crisis. For the results of the G-20 Summit, visit The Pittsburgh Summit 2009.

About IFAC
IFAC (www.ifac.org), the global organization for the accountancy profession with 157 members and associates in 123 countries, promotes the adoption and implementation of international standards and develops guidance to foster high-quality practice by professional accountants working in business, public practice, government, and education.

"The accounting profession can and should take a leadership role in helping the world steer its way out of the global financial crisis," International Federation of Accountants (IFAC) President Robert L. Bunting told the audience gathered in São Paulo, Brazil, for the third annual CReCER conference (Spanish acronym of Accounting and Accountability for Regional Economic Growth).  "At this crossroad for the world economy, this means raising our voice about what we know best-including the capital markets, government accountability, and the small and midsize businesses we call SMEs."

Mr. Bunting reminded the audience that every kind of entity needs the financial information that high-quality standards provide as we move toward recovery from the recession. Businesses in Latin America and the Caribbean often need to prove their economic viability as business partners for new opportunities in the Middle East and China, or for ongoing ones in this hemisphere. Governments need to confirm their fiscal health for the capital markets or for membership in regional economic organizations.

"Governments worldwide must follow the same high standards of financial reporting as their private sector counterparts if we are to believe the economic picture they paint-and to avoid this kind of global meltdown in the future," Mr. Bunting said. "The broad-based adoption of International Public Sector Accounting Standards-which IFAC has also recommended strongly to the G-20 Leaders-is critical to improving government transparency and accountability, in light of the unprecedented takeovers, lending, guarantees, and bailouts of major market institutions, banks, and companies that have taken place," Mr. Bunting added.  He also noted that IFAC is working with the World Bank to develop and strengthen the accountancy profession in developing and emerging economies as a key step in achieving financial stability.

Mr. Bunting also spoke out about the importance of supporting small and midsize businesses and the smaller accountancy firms that serve them in recovery from the recession. "The people behind Latin America's SMEs are vital to creating sustainable growth, jobs, and wealth," he said, because "they turn innovation and agility into new products and services. The OECD says they account for most businesses in all countries and are a major source of new jobs. Yet, they are often a forgotten voice in the regulatory and public policy dialogue. We cannot let this happen."

The CReCER conference, September 23-25, 2009, is designed to increase awareness of the critical importance of sound financial reporting and auditing for the development of a well-functioning market economy and of an efficient public sector-the cornerstones of equitable and sustainable economic development. Over 800 individuals attended, including representatives of the accountancy profession, governments, and the donor community. IFAC, the World Bank, and the Inter-American Development Bank organized the first CReCER event in June 2007, and are joined by IFAC member Conselho Federal de Contabilidade and the six largest accounting networks in the preparation of this year's event, along with other sponsors.
 
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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

Good morning, ladies and gentlemen. I'm delighted to be here today to participate in this special anniversary event. My congratulations to Chief Executive Vickson Ncube, President Koos du Toit of ECSAFA, your past presidents and CEOs, and to you, members, on this milestone in your organization's history. I would also like to recognize the hosting institutes and our IFAC colleagues, the South African Institute of Chartered Accountants and the South African Institute of Professional Accountants, and the chief or platinum sponsor, ACCA, as well as all the other sponsors who have contributed in one way or another to making this occasion a success.

My brief remarks today will focus on looking ahead, to consider what IFAC can--and already does--contribute to the Africa of tomorrow through  sustainable development. I suppose that if you walked down a main street in Johannesburg and asked someone at random what is needed for sustainable development in this country, you might find quite a few people who would say "more sports" and, in particular, "success for Bafana Bafana." But there was also the unexpected visit of the Indian Cricket Premiere League, which provided a big boost to the South African economy, particularly for the travel and tourism sector. And it was followed by another welcome event, this time the Confederations Cup. I also note that construction is moving ahead for next year's FIFA World Cup, which should continue to highlight South Africa's unique attractions, as well as spur its economy.

And yet, man or woman does not live by football alone--not in South Africa, as one of the G-20 nations, and certainly not in other areas of the continent that have much further to go in developing a sustainable economy. What they need is people and innovation, and an economic environment that encourages these entrepreneurs to succeed with their ideas, for this is key to building a sustainable business and social environment.

This IAASB Staff Questions & Answers publication highlights how the design of the ISAs issued under the Clarity Project enables them to be applied in a manner proportionate with the size and complexity of an entity.

To assist auditors worldwide in implementing the clarified International Standards on Auditing (ISAs), the staff of the International Auditing and Assurance Standards Board (IAASB) has developed a new question-and-answer publication entitled Applying ISAs Proportionately with the Size and Complexity of an Entity. The publication is relevant in the context of any audit, but will be of particular help to those who audit, or oversee the audits of, small- and medium-sized entities (SMEs).

"SMEs are an important sector of national economies and one that is sensitive to significant changes in standards," emphasizes James Gunn, IAASB Technical Director. "This staff publication highlights provisions within the ISAs that guide auditors in applying the requirements to audits of SMEs in an efficient and effective manner."

The questions and answers explain how the design of the ISAs enables them to be applied in a manner that is proportionate to the specific characteristics of the entity subject to audit. Furthermore, answers are given to questions relating to audit procedures, work effort, documentation, and professional judgment.

"Many of those with responsibility for financial statement audits are progressing their consideration of implementation issues of the clarified ISAs. We applaud this and believe that the IAASB staff has a role to play in supporting the implementation effort," adds Mr. Gunn.

The publication is available for download free of charge from the IFAC website (http://web.ifac.org/clarity-center/support-and-guidance).

About the IAASB and IFAC
The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance.

IFAC (www.ifac.org), the global organization for the accountancy profession with 157 members and associates in 123 countries, shares in the development and promotes the adoption and implementation of international standards and develops guidance to foster high-quality practice by professional accountants working in business, public practice, government, and education.

In a letter issued today, the International Federation of Accountants (IFAC) has called for broad action by the G20 leaders at their September meeting in Pittsburgh, PA to encourage adoption and implementation of global accounting, auditing, and auditor independence standards to improve the ability of capital markets to work globally. In addition, IFAC has called for the worldwide adoption and implementation of International Public Sector Accounting Standards as a means to greatly improve government transparency and accountability in light of the "unprecedented takeovers, lending, guarantees, and bailouts of major market institutions, banks, and companies." It is also urging that further steps be taken to enhance the governance of the International Accounting Standards Board in order to ensure its legitimacy and its ability to act independently, and without inappropriate political interference, in its standard-setting role.

"The G20 leaders must act quickly to build a reformed international financial system," said Ian Ball, IFAC Chief Executive Officer. "While some nations appear to be moving toward recovery from the financial crisis, underlying problems of accountability and transparency remain. We believe that the adoption of international standards can help to address these issues and play an essential role in resolving the current crisis."

"The G20 should acknowledge that small- and medium-sized enterprises are the engine of the global economy and address their unique needs," emphasizes Robert Bunting, IFAC President. "IFAC's letter emphasizes this and points out that those establishing regulations must take into account any related costs and complexities that will impose burdens on, and threaten the sustainability of, the small business sector."

IFAC's letter to the G20 also includes recommendations on enhancing corporate governance, supporting the long-term strengthening of the accountancy profession in developing countries, and developing new tools and metrics to achieve global sustainability. The submission also asks the G20 to facilitate debate to resolve issues between financial reporting-designed to communicate business performance to investors-and prudential reporting-used to monitor and maintain financial stability. The letter with the full list of recommendations is posted on the IFAC website (http://www.ifac.org/financial-crisis/).

The recommendations reflect the views of the 60 leaders of accountancy organizations who attended the IFAC G20 Accountancy Summit, which took place in London, UK, July 23-24. They build on IFAC's previous submission to the G20, which was issued prior to their April 2009 meeting.

About IFAC
IFAC (http://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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

Governments and regulators need to step up initiatives to promote convergence to global accountancy and auditing standards-and they need to do so quickly-according to over 60 leaders of the accountancy profession who attended the International Federation of Accountants' (IFAC's) G20 Accountancy Summit on July 23 and 24 in London. The summit was organized to achieve consensus by the profession on a series of recommendations to be made to the G20 leaders prior to their meeting in September on issues related to the financial crisis.

Participants unanimously agreed that the public interest would best be served by a single set of high-quality, principles-based financial reporting and auditing standards for listed and public interest entities. 

"It is critical that national standard-setting bodies establish roadmaps to move toward adoption of International Financial Reporting Standards and International Standards on Auditing," emphasized Robert Bunting, IFAC President.

The group stressed the importance of having balanced views in the standard-setting process and ensuring that there is no undue influence from any one stakeholder group. They also emphasized the need for the International Accounting Standards Board to have a robust governance structure that will ensure its effectiveness and independence.

In addition, summit participants called upon governments to follow the same high standards of financial reporting as their private sector counterparts and to adopt International Public Sector Accounting Standards.

"The group expressed strong concerns about the liabilities and contingencies being assumed by governments in many countries as a result of the financial crisis," explained IFAC Chief Executive Officer Ian Ball. "IFAC will continue to emphasize to the G20 the need for governments to provide clear and transparent reporting to their taxpayers and to capital markets."

World Bank Chief Financial Management Officer Tony Hegarty addressed the group, highlighting the urgent need to develop and strengthen the profession in developing and emerging economies as a key step in achieving financial stability. He announced that the World Bank and IFAC will work together to develop a new initiative to deepen cooperation in this area. Summit participants supported this initiative and recommended that G20 governments should partner with the World Bank and IFAC to establish a framework for building sustainable capacity for the accountancy profession.

Other key recommendations from the group included the following:

• The needs of small and medium enterprises (SMEs) need to be considered in the development of standards, as well as in any re-regulation. "SMEs are the economic engine of global growth and we need to ensure that they are not faced with any unnecessary or unintended compliance or other burdens," stated IFAC President Robert Bunting.
• The G20 should continue to make strengthening corporate governance a priority. Focus should be placed on examining the role of independent directors, CFOs, and audit committees, as well as improving the linkage of remuneration schemes with performance.
• There is a need for a more robust financial reporting model that includes, among other things, reporting on sustainability and environmental issues.

These and other recommendations from the summit participants, who represented accountancy organizations in 17 of the G20 countries (see attached), will be included in a communiqué sent to the G20 within the next two weeks.

About IFAC
IFAC (http://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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

To enhance the usability of International Public Sector Accounting Standards (IPSASs) and thus facilitate global convergence, the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has launched an improvements project with the release of Exposure Draft (ED) 42, Improvements to IPSASs. This ED is the first of a proposed series of annual improvements to the IPSASs and is modeled on the successful annual improvements program developed by the International Accounting Standards Board (IASB).

The proposed amendments in the ED are related primarily to the recognition, measurement, or disclosure requirements but do not represent substantive revisions to the content of existing standards. They reflect changes made by the IASB to related International Financial Reporting Standards.

"The financial reporting world of the public sector is a dynamic one," states Mike Hathorn, IPSASB Chairman, "and it is necessary for the IPSASB to continually reassess the IPSASs to ensure that they are relevant to users of public sector financial statements and easy to use by preparers of financial statements."

How to Comment
Comments on ED 42 are requested by September 30, 2009. The ED may be viewed by going to www.ifac.org/Guidance/EXD-Outstanding.php. Respondents are asked to send their comments electronically through the IFAC website, using the "Submit a Comment" link on the Exposure Drafts and Consultation Papers page. Please note that first-time users must register to use this new feature. Although IFAC prefers that comments be submitted using the online submission system, e-mail may continue to be sent to edcomments@ifac.org and stepheniefox@ifac.org. Comments can also be faxed to the attention of the IPSASB Technical Director at +1 (416) 977-8585, or mailed to the IPSASB Technical Director at 277 Wellington Street West, 4th Floor, Toronto, Ontario M5V 3H2, Canada. All comments will be considered a matter of public record and will ultimately be posted on 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 157 members and associates in 123 countries, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

The International Federation of Accountants (IFAC) applauds the call by the US President for urgent progress toward the "development of a single set of high-quality global accounting standards." These standards were one element of the proposal for regulatory reform, issued at a press conference on Wednesday, that Mr. Obama called "necessary to avoid another financial crisis."

"The President's acknowledgment of the importance of developing a high-quality set of global accounting standards reflects the importance of global standards and a level playing field in financial reporting," says Ian Ball, Chief Executive Officer, IFAC. He also noted that the US position is consistent with the G-20's call for "substantial progress by year-end 2009." IFAC wrote to the G-20 in support of convergence to global standards before their meeting in London last April.

Convergence to global standards is an idea that IFAC supports strongly-not only in accounting but also in auditing, ethics, and public sector accounting standards, all of which are important to the functioning of global capital markets.

The complete White Paper issued by Mr. Obama's office, prepared by the United States Treasury Department, can be found at http://www.financialstability.gov/docs/regs/FinalReport_web.pdf.

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 157 members and associates in 123 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. Through its independent standard-setting boards, IFAC sets international ethics, auditing and assurance, education, and public sector accounting standards. It also issues guidance to encourage high-quality performance by professional accountants in business.