INTERNATIONAL FEDERATION OF ACCOUNTANTS

1
Developing a Nascent Audit Profession
World Bank Advanced Program in Accounting and
Auditing Regulation June 28, 2005
2
Overview

• About IFAC
• IFAC Membership and Compliance
• Member Body Obligations
• Compliance Program
• IFAC Developing Nations Permanent Task Force
• Role, Objectives and Priorities
• Establishment and Development of the Profession
• Challenges
• Opportunities for Co-operation and Collaboration

3
IFAC Today

• Global organization for accountancy profession
• Expanding network of 163 member bodies in 119
  countries, representing 2.5 million accountants
• Supported by regional accounting networks

4
IFACs Mission

• To serve the public interest, strengthen the
  worldwide accountancy profession and contribute
  to the development of strong international
  economies

5
Membership and Compliance

• Statements of Membership Obligations
• Approved by IFAC Board March 2004
• Basis for evaluating status of members in good
  standing
• Basis for evaluating new applicants
• Incorporate International Standards
• Assist in implementing the International Standards

6
Seven 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

7
Statements of Membership Obligations

• Obligations whether the SMO function is the
  responsibility of
• The member body or
• Another body (government, regulators, other
  professional organization etc)

8
Compliance with SMOs

• A member has used best endeavors if
• It could not reasonably do more than it has done
  and is doing to meet the particular obligation

9
Member Body Compliance Program

• Three key aspects
• Regulatory and standard-setting framework
  fact-gathering
• Convergence activities and gap analysis
• Action plans and development

10
Compliance Activities

• Part 2 SMO Self-Assessment
• Convergence approach
• Standards incorporated
• Monitoring and quality assurance programs
• Implementation activities
• Part 2 Basis for gap analysis
• Reasons for not incorporating standards
• Regulatory and resource challenges

11
Compliance Activities

• Part 3 Action plans
• Identify solutions
• Member body responsibilities
• Program enforcement action
• Failure to demonstrate evidence of best endeavors
• Lack of participation

12
Communicating Results

• Share and exchange information
• World Bank, development banks, donors
• Results to be posted on IFAC website
• Demonstrate members progress
• Activities to improve audit quality
• Basis for facilitating discussions with
  regulators and governments
• Dialogue with other national bodies

13
Developing Nations Task Force

• Vision
• Every country to have a recognised member body of
  IFAC.
• Mission
• To support the development of the worldwide
  accountancy profession working in partnership
  with the global profession and other relevant
  organisations

14
Priorities

• Tools to assist professional bodies
• Share and transfer information
• Access to resources
• Ways to address challenges to implementation of
  standards
• Experience in facilitating regulatory reform
• Input to standard-setting process
• Grow IFAC membership

15
Role of Accountancy Bodies

• Sustainable development of profession requires a
  professional body
• Objective must be to develop and enhance the
  profession
• Partnership
• Government
• Accountants and Auditors
• Public

16
Development Challenges

• Capacity
• Environment
• Resources

17
Opportunities for Co-operation and Collaboration

• IFAC membership
• Regional co-operation
• Collaboration between the international
  profession, development partners, and governments

18
Conclusion

• High quality standards and practices
• Issues and challenges in developing and
  transition economies
• IFAC activities as a platform for change and
  communication

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www.ifac.org