developing the profession – ifac 1 developing a nascent audit profession world bank advanced...

Developing the Profession – IFACDeveloping the Profession – IFAC

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Developing a Nascent Audit ProfessionDeveloping a Nascent Audit Profession

World Bank Advanced Program in World Bank Advanced Program in Accounting and Auditing Regulation Accounting and Auditing Regulation

June 28, 2005June 28, 2005


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OverviewOverview

• About IFACAbout IFAC• IFAC Membership and Compliance IFAC Membership and Compliance

– Member Body ObligationsMember Body Obligations– Compliance ProgramCompliance Program

• IFAC Developing Nations Permanent Task Force IFAC Developing Nations Permanent Task Force – Role, Objectives and PrioritiesRole, Objectives and Priorities

• Establishment and Development of the ProfessionEstablishment and Development of the Profession– ChallengesChallenges– Opportunities for Co-operation and CollaborationOpportunities for Co-operation and Collaboration


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• Global organization for accountancy Global organization for accountancy professionprofession

• Expanding network of 163 member bodies in Expanding network of 163 member bodies in 119 countries, representing 2.5 million 119 countries, representing 2.5 million accountantsaccountants

• Supported by regional accounting networksSupported by regional accounting networks

IFAC TodayIFAC Today


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IFAC’s MissionIFAC’s Mission

To serve the public interest,To serve the public interest, strengthen the strengthen the

worldwide accountancy profession and worldwide accountancy profession and

contribute to the development of strong contribute to the development of strong

international economiesinternational economies


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Membership and ComplianceMembership and Compliance

• Statements of Membership ObligationsStatements of Membership Obligations– Approved by IFAC Board March 2004Approved by IFAC Board March 2004– Basis for evaluating status of members in good Basis for evaluating status of members in good

standingstanding– Basis for evaluating new applicantsBasis for evaluating new applicants

• Incorporate International StandardsIncorporate International Standards• Assist in implementing the International Assist in implementing the International

StandardsStandards


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Seven SMOsSeven SMOs

• Quality assurance

• Investigation and discipline

• International Education Standards

• Pronouncements and papers issued by the IAASB

• IFAC Code of Ethics

• IPSASs and other PSC guidance

• International Financial Reporting Standards


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Statements of Membership ObligationsStatements of Membership Obligations

• Obligations whether the SMO function is Obligations whether the SMO function is the responsibility of:the responsibility of:– The member body; orThe member body; or– Another body (government, regulators, other Another body (government, regulators, other

professional organization etc)professional organization etc)


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Compliance with SMOs Compliance with SMOs

• A member has used best endeavors ifA member has used best endeavors if– It could not reasonably do more than it has It could not reasonably do more than it has

done and is doing to meet the particular done and is doing to meet the particular obligationobligation


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Member Body Compliance ProgramMember Body Compliance Program

• Three key aspectsThree key aspects– Regulatory and standard-setting framework Regulatory and standard-setting framework

fact-gathering fact-gathering – Convergence activities and gap analysisConvergence activities and gap analysis– Action plans and developmentAction plans and development


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Compliance Activities Compliance Activities

• Part 2 SMO Self-AssessmentPart 2 SMO Self-Assessment– Convergence approachConvergence approach– Standards incorporatedStandards incorporated– Monitoring and quality assurance programsMonitoring and quality assurance programs– Implementation activitiesImplementation activities

• Part 2 Basis for gap analysisPart 2 Basis for gap analysis– Reasons for not incorporating standardsReasons for not incorporating standards– Regulatory and resource challengesRegulatory and resource challenges


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Compliance Activities Compliance Activities

• Part 3 Action plansPart 3 Action plans• Identify solutionsIdentify solutions• Member body responsibilitiesMember body responsibilities• Program enforcement actionProgram enforcement action

– Failure to demonstrate evidence of best Failure to demonstrate evidence of best endeavorsendeavors

– Lack of participationLack of participation


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Communicating ResultsCommunicating Results

• Share and exchange information Share and exchange information – World Bank, development banks, donorsWorld Bank, development banks, donors

• Results to be posted on IFAC websiteResults to be posted on IFAC website• Demonstrate members’ progressDemonstrate members’ progress

– Activities to improve audit qualityActivities to improve audit quality

– Basis for facilitating discussions with regulators and Basis for facilitating discussions with regulators and governmentsgovernments

– Dialogue with other national bodies Dialogue with other national bodies


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• VisionVision– Every country to have a recognised member Every country to have a recognised member

body of IFAC.body of IFAC.

• MissionMission– To support the development of the worldwide To support the development of the worldwide

accountancy profession working in partnership accountancy profession working in partnership with the global profession and other relevant with the global profession and other relevant organisationsorganisations

Developing Nations Task ForceDeveloping Nations Task Force


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PrioritiesPriorities• Tools to assist professional bodiesTools to assist professional bodies• Share and transfer informationShare and transfer information

– Access to resourcesAccess to resources– Ways to address challenges to implementation Ways to address challenges to implementation

of standardsof standards– Experience in facilitating regulatory reformExperience in facilitating regulatory reform

• Input to standard-setting processInput to standard-setting process• Grow IFAC membershipGrow IFAC membership


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Role of Accountancy BodiesRole of Accountancy Bodies

• Sustainable development of profession Sustainable development of profession requires a professional bodyrequires a professional body

• Objective must be to develop and enhance the Objective must be to develop and enhance the professionprofession

• PartnershipPartnership– GovernmentGovernment

– Accountants and AuditorsAccountants and Auditors

– PublicPublic


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Development ChallengesDevelopment Challenges

• CapacityCapacity

• Environment Environment

• ResourcesResources


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Opportunities for Co-operation and Opportunities for Co-operation and CollaborationCollaboration

• IFAC membershipIFAC membership

• Regional co-operationRegional co-operation

• Collaboration between the international Collaboration between the international profession, development partners, and profession, development partners, and governments governments


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ConclusionConclusion

• High quality standards and practicesHigh quality standards and practices

• Issues and challenges in developing and Issues and challenges in developing and transition economies transition economies

• IFAC activities as a platform for change and IFAC activities as a platform for change and communicationcommunication


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www.ifac.org

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