In 2006, the International Federation of Accountants (IFAC) issued seven statements of membership obligations (SMOs) to assist ‘high quality performance by professional accountants’. The member bodies of IFAC, which includes national accountancy bodies from most of the countries in the world, were required to give their best efforts to abide by the SMOs, and failure to do such without satisfactory explanations would result in suspension or removal of membership. The seven SMOs issued by the IFAC covered areas such as audit quality, audit education, code of ethics for professional auditors, disciplinary procedures to be adopted by national auditing bodies, adoption of ISAs and IFRS, and accountability and auditing in the public sector.

Like many other researchers and academics in this area, I was also initially skeptical of the applicability of these SMOs in a less developed country (LDCs) such as Bangladesh, given that that these mechanisms, developed in the context of developed economies, would only work under assumptions of an efficient capital market, higher investor sophistication, and presence of effective second order institutions (such as efficient regulators, judiciary etc) that would complement such governance schemes. However, a few years down the line, it appears that some of these globalization attempts are actually producing results that might change the image of the accountancy profession in this impoverished yet economically promising nation.

This article was originally published in Business & Economy - Banking, Finance, Markets on August 1, 2011.

The IESBA Strategic and Operational Plan 2008-2009 sets out the activities of the IESBA for the period 2008 to 2009 following the completion of its current projects on independence and on improving the clarity of the IFAC Code of Ethics for Professional Accountants. The plan is set within the context of the overall strategy of IFAC.

Welcome to the first issue of the IFAC Member Body Development eNews.

IFAC's Member Body Development activities include promoting and supporting the role of professional accountancy organizations, facilitating the work of its members in the adoption and implementation of international standards, collaborating with the donor community to build capacity in emerging economies, and raising awareness about the issues being addressed by the profession globally. These activities are carried out by the Member Body Development staff with advice and consultation from the IFAC Compliance Advisory Panel and the Developing Nations Committee.

The Member Body Development eNews will highlight the work of IFAC members, recognized regional organizations, and acknowledged accountancy groupings, and the development community to strengthen and contribute to the worldwide accountancy profession.

We welcome all of your comments and suggestions for making this new publication even better. For further information, please contact communications@ifac.org.

In this Issue:

1) IFAC Members Focus on Actions and Continuous Improvement
2) Capacity Building Initiatives
3) New IFAC Members and Associates
4) International Standards Adoption - ISA Update
5) Share MBD eNews With Your Colleagues

1) IFAC Members Focus on Actions and Continuous Improvement

The IFAC Member Body COmpliance Program was launched in 2004 to encourage continuous improvement by IFAC members and associates. The foundation of the program is articulated in IFAC's membership requirements (Statements of Membership Obligations (SMOs)). The SMOs cover seven areas of relevance to the profession and focus on promoting the adoption and implementation of international standards, as well as investigation and disciplinary mechanisms and external quality assurance.

The program is currently in the Part 3, Action Plan phase, launched after the initial two phases that were designed to gather information about national standard setting and regulatory frameworks. Action Plans are developed by IFAC members and associates to illustrate how these organizations are addressing SMOs requirements. In the interest of transparency, action plans are published on the IFAC website. To date, 76 organizations have published their Action Plans on the IFAC website with an additional 39 plans under review by the Compliance staff.

The Action Plan process recognizes that IFAC members and associates are at different stages of development and operate in different jurisdictions. However, the primary purpose of the process is to encourage continuous improvement.

 "Participating in the Compliance Program has been a truly meaningful and rewarding experience for CICPA, leading to important improvements in major areas of the development of the accounting profession in China. The Policy Recommendation and Action Plan process, in particular, have been very helpful for us to work out the convergence plan, enhance the quality assurance program, and communicate effectively with regulators, the government, and other key stakeholders." (The Chinese Institute of Certified Public Accountants)

In the coming issues of this eNews, we will be highlighting interesting and insightful developments related to the process.

2) Capacity Building Initiatives

Through Member Body Development activities, IFAC seeks to represent the profession in developing nations, and provide guidance and other resources to meet their needs. IFAC also seeks funding from the donor community for the strengthening of the accountancy profession in developing nations. Some of these initiatives are highlighted below.

West Africa Workshop
In November 2009, several professional accountancy bodies of West Africa participated in the conference organized by the Association of Accountancy Bodies in West Africa (ABWA) in Senegal. In addition to participating in the event, IFAC staff and Developing Nations Committee members organized a workshop attended by 12 of the 15 ABWA member bodies, ABWA leadership, and representatives from the World Bank to focus on the role of professional accountancy organizations and the requirements for IFAC membership. The workshop participants discussed the IFAC membership application process and Member Body Compliance Program. They also discussed the international standard-setting process in the region of West Africa. The economic size and unique regulatory framework of the region has resulted in establishing a regional mechanism coordinating standard setting for the francophone countries in the region.

Outreach in Poland, Latvia, Lithuania
Also in November 2009, Member Body Development staff met with IFAC members in Poland, Lithuania, and Latvia. The meetings with these national professional accountancy organizations served as an opportunity to follow-up on recent developments with regards to implementation of European Union regulations relating to the profession, as well as the progress of their Action Plans. Additional meetings were held with key stakeholders in each country, including representatives of Ministries of Finance and Public Oversight bodies. Information was exchanged on the roles of the profession and the oversight body in meeting EU requirements, and the general progress of oversight mechanisms.

Central America Workshop
IFAC representatives organized and lead discussions at a workshop on the IFAC Action Plan process in Panamá in January 2010. The initiative was proposed and hosted by the Colegio de Contadores Públicos Autorizados de Panamá (CCPAP) with the event being attended by IFAC members in the Dominican Republic, Nicaragua, and Costa Rica, the president of the regional organization, the Inter-American Accounting Association, and a World Bank financial management specialist for the sub-region. Representatives from an accountancy organization in El Salvador also attended the workshop as part of their interest in IFAC membership. Representatives from the member bodies presented on their progress with drafting Action Plans and exchanged experience on region-specific challenges, including strengthening education requirements and providing meaningful implementation support for the international standards being adopted in their countries. A representative from the World Bank also presented on the World Bank perspective of the Action Plan process, noting particular usefulness of the process for the capacity building of the accountancy profession. At the conclusion of the workshop, all participants and presenters agreed that going forward this type of collaborative approach is the best way for progress to be achieved and sustained.

3) New IFAC Members and Associates

During IFAC's 32nd Annual Council Meeting, the IFAC Council approved five new organizations to member or associate status. We congratulate them on this significant achievement.

New Members

1. Iran - Iranian Association of Certified Public Accountants (IACPA)

The Iranian Association of Certified Public Accountants was created by law in 1994 and became operational in 2001. IACPA members, in addition to audits of financial statements, perform management consultancy, accountancy work, insolvency and liquidation management, internal audits, and management (performance) audits. IACPA has about 1,800 CPA members employed in the public practice, business, and public sectors. In September 2009, IACPA finalized its IFAC Compliance Program Part 3, Action Plan, which is published on the IFAC website.

2. Latvia - Latvian Association of Certified Auditors (LACA)

The Latvian Association of Certified Auditors was created pursuant to the Law on Certified Auditors of January 1, 1977. LACA is officially recognized as the only professional organization in Latvia authorized to unite all certified auditors and commercial companies of certified auditors. Presently, LACA is comprised of 160 certified auditors and 140 audit firms and this number is adequate for the size of the audit market in Latvia. According to the Audit Law, only members of LACA are authorized to perform statutory audits. Additional information about LACA's planned activities are described in its Action Plan.

3. Kosovo - Society of Certified Accountants and Auditors of Kosovo (SCAAK)

The Society of Certified Accountants and Auditors of Kosovo was created under the framework established by the Law on Financial Reporting of 2001. SCAAK is the only professional accounting and auditing body in Kosovo and has a clear objective of supporting adoption of international standards. SCAAK membership includes 124 certified auditors, 548 certified accountants, and 1,318 accounting technicians. Additional information about SCAAK's planned activities are described in its Action Plan.

New Associates

4. Brunei Darussalam - Brunei Darussalam Institute of Certified Public Accountants (BICPA)

The Brunei Darussalam Institute of Certified Public Accountants was registered with the Registrar of Societies of Brunei Darussalam on June 7, 1987. It was formed to allow the accountants in Brunei Darussalam to develop and promote the profession in the country. BICPA plays a role in advising the Ministry of Finance of Brunei in standard-setting activities and supporting implementation of standards. Members of BICPA are recognized by the Ministry of Finance as public accountants (Authorized Auditors). BICPA membership, currently 70 members, reflects the small population of the country. As an IFAC associate, BICPA will work on developing its IFAC Compliance Program Part 3, Action Plan.

5. Luxembourg - Ordre des Experts-Comptables du Luxembourg (OEC)

The Ordre des Experts-Comptables du Luxembourg joins IFAC as the second organization representing Luxembourg. OEC is the professional accountancy organization representing the profession of experts-comptables in the country. It was originally established as the Ordre des Experts-Comptables Luxembourgeois (OECL) in 1950. Following the changes in the country's legal framework, it was transformed into OEC in 1999. OEC has close to 1,000 members that provide a wide range of services, including preparation of financial statements and contractual audits. As an IFAC associate, OEC will work on developing its IFAC Compliance Program Part 3, Action Plan.

4) International Standards Adoption - ISA Update

Professional accountancy organizations play an important role in the adoption and implementation of international standards within effective regulatory frameworks. This includes the adoption and of International Standards on Auditing (ISAs) as developed by the International Auditing and Assurance Standards Board (IAASB). To help the public, member bodies, and other stakeholders better understand the ongoing nature of the adoption process, IFAC has released an interactive chart that captures the status of ISA adoption process in different jurisdictions around the world Basis of ISA Adoption chart.

The chart, at the time of publication of this eNews, shows that a total of 126 jurisdictions worldwide have adopted ISAs to at least some degree. The basis of ISA adoption used in preparing the chart is categorized as follows:  

Adoption of ISAs, including the clarified ISAs, and changes to strengthen local regulatory and standard-setting frameworks is an ongoing process. Consequently, the chart and related notes will be updated as national standard-setters and IFAC members provide information about their country's progress. Compliance staff encourages information to be submitted to Technical Manager Szymon Radziszewicz.   

5) Share MBD eNews with Your Colleagues

Going forward, the MBD staff will issue regular eNews updates to keep you current on recent developments. Please forward this eNews to any interested colleagues and advise them that they can subscribe to receive the next issue of MBD eNews.

For more information about any of the items mentioned above or other information about the Member Body Compliance Program, the Compliance Advisory Panel, or the Developing Nations Committee and IFAC, please contact communications@ifac.org.

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I am truly delighted to be here today to participate in this important event. My thanks and congratulations to Jorge Paganetti and to FACPCE for hosting CReCER this year.

The title of this session is Key Factors for the Development of Capital Markets.

We will hear from a variety of speakers, including representatives of the World Bank, the Inter-American Development Bank, and the Global Public Policy Committee.

They will speak about openness, transparency, the public sector, and the role of the auditor. I would like to spend a few minutes on IFAC’s role, and how we work with the other organizations to support efficient, effective capital markets.

Good morning, ladies and gentlemen. I am truly delighted to be here today to participate in this important event.

As you are all aware, the global financial crisis has focused a spotlight on the relationship between the accountancy profession, financial stability, and overall economic and social progress.

After all, accountancy is the foundation of high-quality financial information. And high-quality financial information increases transparency, enhances the effective management of public resources, and furthers country stability and economic growth—which, in turn, facilitates foreign direct investment.

Good afternoon, ladies and gentlemen. I am truly delighted to be here today to participate in this important event. We have been anticipating this event for 4 or 5 years now, and I know a lot of people have worked very hard to make this happen and to make PAFA a reality.

My congratulations to Matsobane Matlwa, Chairman of the PAFA Steering Committee and all stakeholders involved in the development of PAFA. And many thanks to Mamour Fall, President of ONECCA Senegal, for hosting this event, and to Aziz Dieye and Patrick Kabuya, Members of the Steering Committee, for actively contributing to its organization.

And, on behalf of IFAC, congratulations to Senegal on your big move in the FIFA world rankings. Even though it was announced several weeks ago, I thought there would still be parties to celebrate! But we have enough to celebrate with the launch of PAFA.

It’s an important step. To me, one of the most impressive things is that this was done during a period of global financial crisis!

Thank you, Chris, for the introduction. Good morning ladies and gentleman. It is a pleasure being here today and I want to thank you all for coming so early on a Saturday morning. The topic for my comments today is global developments in the accountancy profession. While I will focus on global developments, the issues I will address certainly have local implications.

The global economy is still emerging from a crisis that has tested the international financial system to its limits. The most critical phase of the crisis may, and I stress may, have passed, but recovery remains fragile, and the impact of the crisis continues to be being felt around the world. As a profession we need to think about both how we can contribute to the avoidance of future crises, and how the current crisis will affect our role in the economy and society going forward.

This morning I will introduce the International Federation of Accountants (IFAC), outline the diversity of our profession, describe very briefly the nature of regulatory developments in recent years, and identify some likely developments for the future

This guide is intended to assist IFAC members and potential members in developing sustainable capacity. In particular, the guide is designed to assist professional accountancy organizations in developing qualified accounting technicians through education, training, and assessment of skills and competence.

The guide also recommends professional accounting organizations provide ongoing professional development of accounting technicians and have activities in place to monitor their compliance with ethical requirements.