High-quality reporting should transparently demonstrate how organizations preserve and create value over time. As a global advocate for integrated reporting, IFAC’s 2017 annual review is designed to offer information on our financial, human, social and intellectual capitals alongside our strategic objectives, governance arrangements and financial highlights. It also describes how we strengthen organizations and enhance economies by supporting and empowering our member organizations and the global accountancy profession in the public interest.

This review is part of our 2017 suite of reporting, which also comprises our Financial Statements for the year ended December 31, 2017. With this annual review, we are continuing a journey of more fully implementing the integrated reporting principles and concepts IFAC advocates for globally—those set out in the International Integrated Reporting Council’s Integrated Reporting Framework.

The Western Balkan professional accountancy organizations (PAOs)—a group of PAOs comprising both IFAC members and non-members—have expressed interest in furthering their regional cooperation in the area of accountancy education and professional development in order to accelerate the development of the accountancy profession in the region.

Both IFAC and the World Bank Centre for Financial Reporting Reform (CFRR) have been working with the PAOs through their respective programming. In April 2018, the two organizations joined together to host a joint one-day Education Community of Practice workshop. Over 60 participants, including the leadership of PAOs from all over Europe, international experts, and members of IFAC’s Compliance Advisory Panel and PAO Development Committee participated in the event.

The workshop hosted panel sessions and open discussions where participants exchanged experiences, best practice examples, and the vision for the future.  

IFAC staff presented its recent International Standards: 2017 Global Status Report and the opportunities and challenges that lie ahead for the accountancy profession at both a global level and for the Western Balkan region in particular. The report also highlights available resources, guidance, examples of best practice, and observations, including the need for multi-stakeholder collaboration and support from national, regional and global organizations to maintain the progress made thus far in the adoption and implementation of international standards.

Further details and materials from the workshop are available on the CFRR’s website.

What is the impact of blockchain on accounting? This resource breaks down:

Small- and medium-sized practices (SMPs) in a digital, globalized world need to adopt "good practices" to best serve their clients. IFAC (International Federations of Accountants) has released an updated publication—the Guide to Practice Management for Small- and Medium-Sized Practices Fourth Edition (the Guide) to help SMPs meet this challenge. The Guide will help SMPs improve their management and operational efficiency and support their sustainability and success.

Now in its fourth edition, the Guide is organized into eight stand-alone modules, including a new module on Leveraging Technology. The revised Guide addresses a comprehensive range of topics including:

• Strategic planning;
• Managing staff;
• Client relationship management;
• Risk management; and
• Succession planning.

The new Leveraging Technology module covers how technology developments are fundamentally changing the way organizations operate and recognizes that SMPs must adapt to service their clients that utilize technology. Included are topics such as developing a technology strategy, hardware and software options, technology risks, new and emerging technologies, and leveraging technology for practice innovation.

In order to help IFAC member organizations and practices maximize the Guide’s use, IFAC has updated the Companion Manual, which provides suggestions on making best use of the Guide.

Welcome to the fourth edition of the IFAC Guide to Practice Management for Small- and Medium-Sized Practices.

IFAC (International Federation of Accountants) commissioned Gibson Dunn, a leading global law firm, to perform an independent qualitative and quantitative analysis of the public responses to the Consultation Paper published by the Monitoring Group: Strengthening the Governance and Oversight of the International Audit-related Standard-setting Boards in

IFAC (International Federation of Accountants) commissioned Gibson Dunn, a leading global law firm, to perform an independent qualitative and quantitative analysis of the public responses to the Consultation Paper published by the Monitoring Group: Strengthening the Governance and Oversight of the International Audit-related Standard-setting Boards in the Public Interest.

A large number of responses were received from stakeholders from around the world.

• The 179 responses included investors, standard setters, government auditors, regulators, researchers, individuals, accounting firms and professional organizations from a wide range of geographies.
• In any consultation, the input from all respondents must be considered. It should be noted that 74 professional accountancy organizations, or 41 percent of all respondents, felt strongly enough to provide comments. Notably, the overall, main conclusions from the report remained intact even when responses from these accountancy organizations were removed from the analysis.

The Gibson Dunn analysis highlighted marked differences of opinion across geographies and stakeholder groups on key proposals, but included several overall, main conclusions:

• Respondents generally criticized the premise of the Consultation Paper, namely that there are major concerns with the current standard-setting process. Respondents also expressed concern that a Public Interest Framework to evaluate change has not yet been issued and agreed.
• Respondents generally expressed skepticism regarding the broader governance changes proposed by the Consultation Paper.
• Respondents provided significant support for some operational changes proposed in the Consultation Paper.

After carefully reviewing the report IFAC has the following observations:

Broad support and agreement for any Public Interest Framework is necessary before any of the broader governance changes proposed can be properly assessed.

• While there was virtually universal agreement that any changes must be in the public interest, there was significant criticism that the proposed Public Interest Framework has not been released for consultation.
• The Public Interest Framework, agreed by stakeholders, should include multi stakeholder composition of both the standards boards and their oversight bodies, and should provide the umbrella within which all significant proposals can be evaluated and agreed as an integrated package by key stakeholders.

Seeking consensus on proposals which could have a significant global impact depends not only on the merits of the proposals but also on the way the process is conducted; a new multi stakeholder approach is needed.

• The way forward should be under the direction of a multi stakeholder group that will engage all key stakeholders in a broad, open and collaborative dialogue.
• The need for this multi stakeholder group is reinforced not only by the multi stakeholder elements that should undoubtedly form part of the Public Interest Framework but also by the differences of opinion that currently exist across geographies and stakeholder groups.
• Without this approach global agreement and international acceptance is unlikely.

Change and transition can bring significant disruption and risk that must be mitigated.

• Any steps taken must not jeopardize the existing widespread adoption of the International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants (IESBA) standards, their acknowledged high quality, or the standard boards’ current work plans.
• This concern is particularly relevant at a time when the standard-setting process must deal in a timely way with the impact of changes to complex accounting standards, as well as a rapidly changing technology and audit environment.
• Any changes proposed must be justified on a cost/benefit basis and have widespread international support, particularly as there is general agreement among respondents on the absence of significant problems with the current standard-setting processes.
• Forming a multi stakeholder group to take the process forward should assist in mitigating disruption and risk.

Steps to improve operational processes can and should be taken quickly.

• There is strong support for some operational changes.
• IFAC takes its responsibility to support the operations of the independent standard-setting boards very seriously.
• IFAC is reviewing identified operational areas with IAASB and IESBA leadership and other stakeholders to determine the actions they would agree can be taken now to improve the efficiency and effectiveness of the operations of the two boards in the public interest.

IFAC intends to actively engage with all stakeholders to seek a revised approach to improve the standard-setting process, that responds constructively to the feedback received, and that is:

• Grounded in a Public Interest Framework that needs to be agreed as a first step in the process.
• Under the direction of a multi stakeholder group.
• Designed to minimize disruption and risk.
• Focused on making agreed operational improvements.

IFAC welcomes stakeholders’ reactions to these observations.

Please send any comments to communications@ifac.org.

Nearly 80% of jurisdictions worldwide have adopted International Standards for Auditing for mandatory audits, while more than 60% have fully adopted the international Code of Ethics for Professional Accountants, according to a new study by IFAC—International Federation of Accountants—on rates of adoption of international standards across 80 of the jurisdictions in which IFAC’s more than 175 member organizations operate.

High-quality international standards are essential pillars of the global financial architecture. Their adoption and implementation improve the availability of the high-quality financial information in the public and private sectors that improves decision making and ultimately results in greater economic growth, development, and accountability.

“This forward momentum is positive news for investors, governments, businesses of all sizes, global regulators and the public given these standards’ relevance to the entire global finance structure,” said Alta Prinsloo, Executive Director, Quality & Development. “Following comparable international standards enable businesses to produce financial information that decision makers can rely on.”

The data is included in a first-of-its kind report that assesses and publically reports on the global status of the adoption of international standards—International Standards: 2017 Global Status Report. The report details the high rates of adoption around the world, driven by IFAC and its member organizations, and positive results in several key areas, including ethics, financial reporting standards, and quality assurance, and provides examples of success and tools for continued progress.

About IFAC
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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.