Elemental changes to the current format of financial reporting need to be made to increase its relevance and stakeholder value and stem the increasing complexity that has plagued financial reporting in recent years, according to key business leaders from around the world interviewed by the International Federation of Accountants (IFAC). Developing a new form of reporting that integrates an organization’s social and environmental performance with its economic performance, in a simplified manner, would benefit all stakeholders, according to interviewees. These and other recommendations are summarized in the report, Integrating the Business Reporting Supply Chain, released today by IFAC.

The report is based on IFAC’s interviews with 25 prominent business leaders, representing preparers, directors, auditors, standard setters, regulators, and investors, on what should be done to effectively improve governance, the financial reporting process, the audit, and the usefulness of business reports in the aftermath of the financial crisis. The report provides a summary of interviewees’ recommendations in each area and highlights some of IFAC’s related initiatives.

“Society needs successful commercial organizations that act responsibly, and it is important that the business reporting system not only allows but actively promotes this corporate philosophy. There is much debate as to whether or not the current reporting system is fit for this purpose, and this report seeks to drive forward the debate in the crucial areas: governance, financial reporting, financial auditing, and the usefulness of business reports,” said Charles Tilley, chair of the IFAC Business Reporting Project Group.

Strong governance lies at the core of high-quality business reporting. Interviewees agreed that good governance starts with tone at the top. Additional recommendations to strengthen governance in organizations include:

• Governance codes should be principles based and stakeholder driven;
• Collaborative, global effort is required to address systemic risk; and
• More independence should be required of boards of directors.

Improving financial reporting depends on simplifying reports, so that they are easily understood by all stakeholders in the reporting supply chain, according to interviewees. Interviewees also called upon regulators and standard setters to limit the financial reporting burden on smaller and non-listed entities.

In the area of auditing, interviewees agreed that limited audit choice is a challenge that needs to be addressed. They also made recommendations to further improve practice development and auditor communication, and recommended that auditors expand the scope of their assurance services to include non-financial information, such as the social and sustainable performance information included in integrated business reports.

Interviewees acknowledged that achieving integrated business reporting will be very hard to accomplish, and will require all stakeholders in the business reporting supply chain to manage the challenges—including litigation risks and regulations that may inhibit change—in a coordinated way.

IFAC would like to thank all of the business leaders who agreed to be interviewed, graciously lending their time and expertise, and without whom this project would not have been possible. To access a summary of the key recommendations, the interview transcripts, and a series of articles based on the interviews, visit the IFAC website. More information about the project group and their previous work is also available on this site.

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 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The PAIB Committee's survey on risk management and internal control received over 600 responses from around the globe. This information paper provides an analysis of the survey results and summarizes respondents' recommendations for the next steps in this area.

Risk management and internal control frameworks, standards, and/or guidance should be aligned internationally, according to the results of the Risk Management and Internal Control Survey released by the IFAC Professional Accountants in Business (PAIB) Committee. With over 600 responses from around the globe and from all types of organizations, the survey results also highlighted that:

• risk management and internal control systems should be better integrated into the governance, strategy, and operations of organizations; and
• risk management and internal control guidelines should be combined into a set of integrated guidelines, as both elements are integral parts of an effective governance framework.

As many organizations have international activities, further international alignment of risk management and internal control guidelines would benefit their operations and compliance processes, reducing costs and allowing for the comparison of these systems across borders and, thus, increasing investor confidence.

Recommended Next Steps
Respondents recommend that national and international standard-setting bodies and professional associations, as well as the relevant regulators, collaborate to (a) determine the major similarities and differences between the various guidelines, (b) compile leading risk management and internal control practices, and (c) consider the benefits of further integration and international alignment of regulations and guidelines in the area of governance, risk management, and internal control. Respondents would like to see these discussions lead to the establishment of an international, integrated framework. To further international alignment, existing national guidelines could be expanded or modified—with allowances made for specific national circumstances—to meet the principles of an international framework.

The survey analysis, Global Survey on Risk Management and Internal Control—Results, Analysis, and Proposed Next Steps, is available at http://www.ifac.org/publications-resources/global-survey-risk-management-and-internal-control.

About the PAIB Committee
The PAIB Committee (www.ifac.org/paib) serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, financial services, the public sector, education, and the not-for-profit sector. Its aim is to promote and contribute to the value of professional accountants in business by increasing awareness of the important roles professional accountants play, supporting member bodies in enhancing the competence of their members, and facilitating the communication and sharing of good practices and ideas.

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. It is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) today released for comment a Consultation Paper, Competent and Versatile: How Professional Accountants in Business Drive Sustainable Organizational Success, that highlights how employer expectations of professional accountants in business are expected to change in light of global trends and evolving organizational needs.

The paper analyzes these expectations in relation to eight drivers of sustainable organizational success—what companies need to do to achieve and sustain success in the changing global economic landscape. The drivers were defined based on an analysis of three long-term trends influencing organizations: globalization, complexity, and technology. The drivers provide the framework for key activities that professional accountants will be expected to perform. These activities are highlighted under the following four roles that form the cornerstones of the services provided by professional accountants: creators, enablers, preservers, and reporters of sustainable value. Previously defined in the proposed PAIB Strategy and Work Plan 2010-12, these roles have received wide support so far.

IFAC PAIB Committee Chair Roger Tabor commented, “This employer-based view of the expectations of professional accountants in business will help accountants prepare for the roles they will be expected to fill in the future. The world is changing, organizational needs are evolving, and professional accountants need to adapt their skills and competences to these changing requirements and circumstances. Our demand-driven approach will enable the global accountancy profession to ensure that its members are positioned to help drive their organization’s sustainable performance.”

The discussion questions that precede the Consultation Paper ask for feedback on, for example, the usefulness of developing an international competency framework that would cover the roles and domain of professional accountants in business, among other key topics.

Comments on the Consultation Paper are requested by November 30, 2010.

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 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

IFAC today released for comment an exposure draft (ED) setting out its proposed 2010-2012 strategy and work plan prepared by its Professional Accountants in Business (PAIB) Committee.

The proposed plan outlines the direction and priorities of IFAC's services relevant to professional accountants in business. This public consultation is a first-time opportunity for IFAC member bodies and other key stakeholders to comment on the proposed vision, strategic direction, and corresponding work plan for this key constituency.

The proposed strategic direction focuses on enhancing the profile, influence, and relevance of professional accountants in business and identifies two specific objectives:

1. Increasing awareness of the important roles professional accountants play in creating, enabling, preserving, and reporting value for organizations and their stakeholders; and
2. Supporting the professional accountants in business within IFAC member bodies by facilitating the communication and sharing of good practices and ideas.

"Well over half of the total number of professional accountants is within enterprises, and these professional accountants in business play a wide range of roles," said PAIB Committee Chair Roger Tabor. "The proposed strategic direction provides a basis for IFAC to determine how best to serve this large, diverse constituency at a global level."

How to Comment
To access the exposure draft or submit a comment, please visit www.ifac.org/PAIB/ExposureDrafts.php. Comments on the exposure draft are requested by July 14, 2010.

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 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

The International Federation of Accountants (IFAC) and The Prince's Accounting for Sustainability (A4S) Project have entered into a memorandum of understanding to support the global accountancy profession's role in developing sustainable organizations.

Organizations are increasingly seeking new ways to maintain their economic performance and contributions to society in the face of challenge and crisis. Perhaps the most critical challenge facing business and society generally is to live within our ecological limits, while continuing to enjoy economic prosperity. IFAC and A4S believe that an essential part of the answer lies in going beyond traditional ways of thinking about performance and embedding sustainability into strategy, governance, performance management, and reporting processes.

Key priorities to support the work of professional accountants in embedding sustainable practices include:

• Raising awareness and facilitating sharing and collaboration across the global accountancy community, for example, through the development of a community website for professional accountancy organizations, business leaders, academics, and other experts to exchange ideas and share good sustainability practice;
• Establishing an international integrated reporting committee to develop a new reporting model that will better reflect the interconnected impact of financial, environmental, social, and governance factors on the long-term performance and condition of an organization; and
• Incorporating accounting for sustainability within professional training and education.

Professional accountants in organizations support the sustainability efforts of the organizations they work for in leadership roles in strategy, governance, performance management, and reporting processes. They also oversee, measure, control, and communicate the long-term sustainable value creation of their organizations.

Paul Druckman, Chairman of the A4S Executive Board, states, "We will only be able to achieve a sustainable future if all organizations, and all individuals within those organizations, recognize the role that they can and need to play. Effective action by the accounting and finance community to better account for sustainability is an essential part of the response. The collaboration between IFAC and A4S will help to make this a reality."

"Professional accountants play a vital role in helping to create sustainable organizations and markets, especially in the areas of accountability and measurement of results," says Robert Bunting, President of IFAC. "I am delighted that our two organizations are working together to advance the role of sustainability leadership and reporting at a global level, fostering collaboration with key stakeholders and developing best practices for integrating sustainability issues in the way we do business."

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 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

About the A4S Project
The Prince's Accounting for Sustainability Project works with businesses, investors, the public sector, accounting bodies, NGOs and academics to develop practical guidance and tools for embedding sustainability into decision-making and reporting processes. To date, the project has involved the collaboration of more than one hundred and fifty public and private sector organizations.

This IAASB Staff Q&A highlights the growing interest in, and use of, XBRL and raises awareness about how XBRL-tagged data is prepared and how it may affect financial reporting. It also clarifies that the IAASB's auditing pronouncements do not impose requirements on auditors with respect to XBRL-tagged data or the representation of this data.

"Enterprise Governance" was chosen as the top article published in 2009 for Professional Accountants in Business (PAIB) by the member bodies of the International Federation of Accountants (IFAC). The Articles of Merit Award Program identifies and promotes outstanding articles on financial and management accounting topics that have previously appeared in the publications of IFAC's 159 member bodies and associates. The articles were selected by IFAC's PAIB Committee and visitors to IFAC's International Center for Professional Accountants in Business.

The 2009 winning article challenges conventional business thinking: Businesses should be more circumspect during a boom and be better prepared to take risks under harsh conditions. It was first published in Financial Management, the monthly members' magazine of the Chartered Institute of Management Accountants.

"Enterprise Governance" and the other top articles form the basis of an annual publication, also called Articles of Merit, which covers the important issues affecting the work of professional accountants worldwide. The publication's nine runner-up articles offer additional advice and insights for professional accountants in business on such topics as capital grants, investment appraisal, and shared services, with useful ideas on matters such as governance and risk management, accounting for sustainability, and writing board reports.

The 2009 Articles of Merit, together with previous publications, can be downloaded free of charge from the Publications & Resources section of the IFAC website. Each of the ten articles may also be downloaded individually.

About IFAC and the PAIB Committee
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. It is comprised of 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

IFAC's PAIB Committee serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, the public sector, education, and the not-for-profit sector. The committee facilitates the global development and sharing of knowledge, develops good practice guidance, and promotes the roles and domain of professional accountants.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) invites accountancy professionals in all areas of business and government to participate in selecting the winner of its 2009 Articles of Merit Award Program. The program seeks to identify and promote outstanding articles on financial and management accounting topics that have appeared in publications of IFAC's 157 member bodies and associates.The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) invites accountancy professionals in all areas of business and government to participate in selecting the winner of its 2009 Articles of Merit Award Program. The program seeks to identify and promote outstanding articles on financial and management accounting topics that have appeared in publications of IFAC's 157 member bodies and associates.

The PAIB Committee serves IFAC member bodies and the more than one million professional accountants worldwide who work in commerce, industry, the public sector, education, and the not-for-profit sector. The committee facilitates the global development and sharing of knowledge, develops good practice guidance, and promotes the roles and domain of professional accountants in business.

"Our Articles of Merit Program is an excellent way for IFAC members-whose professionals are in a prime position to reflect on issues of relevance to professional accountants in today's environment-to share their experiences with colleagues around the world," states Roger Tabor, Chair, PAIB Committee.

Readers are invited to rate 35 articles competing for this year's award. They cover a broad range of issues affecting PAIBs and business in general, including governance and risk management, managing through the financial crisis, accounting for sustainability, raising finance, managing cash flow, and financial reporting, among others. This input will be used to support the PAIB Committee judging panel in selecting the winning article and runners-up. To view and rate the articles, please see web.ifac.org/PAIB/articles-of-merit-2009 before November 15, 2009.

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.