International Developments in Accounting and Audit Regulation

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International Developments in Accounting and
Audit Regulation
An Audit Practitioners view Andrew
Popham Vice-President, FEE Partner,
PricewaterhouseCoopers LLP
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The Virtuous Circle
Accounting Standards
Auditing Standards
Enforcement
Quality Assurance
Corporate Governance
Training Development
Objectivity Independence
Transparency
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Accounting standards and enforcement

• IFRS and listed companies
• Principles, rules and convergence
• Immature framework and complexity
• Consistency or uniformity?
• Unlisted sector
• Applicability and complexity of IFRS
• Can we cope with two frameworks?

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Corporate Governance and transparency

• A frame of mind, not a compliance activity
• The role of the independent director
• Risk management and internal control
• Investor need for assurance or information?
• Impact on risk appetite
• Auditor association
• Value creation and value delivery
• Explain how and why, not just what

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Auditing Standards

• ISAs and Clarity
• Objectives, need for judgement and required
  procedures
• SMEs and public interest entities
• EU ISA adoption

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Quality and Regulation
Quality of Implementation
Poor
Objective based
Precise procedures
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Quality assurance

• You get what you measure
• Test judgements or compliance?
• Resourcing
• Outsourcing

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Training and development

• Technical skill is only the start
• A profession in which the best people want to
  work
• Courage and perseverance
• Ethical values

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Objectivity and independence

• Objectivity prevents audit failure but is just
  a frame of mind
• Independence has no measurable impact on audit
  failures, but is the external proxy for
  objectivity
• Threats and safeguards vs rules
• Audit firm rotation is no solution

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Accounting and auditing at a cross-roads
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Thank you for listening

• Questions?