Over 40 senior audit professionals from 23 international networks of accounting firms met yesterday to share their experiences, industry insights, and current practices in establishing and strengthening global internal inspection processes, at a workshop organized by the Forum of Firms (Forum). The Forum assembled a group of experts to discuss new developments, including innovations in inspection organization, methodology and staffing, practical implementation issues, and processes for internal reporting.

"This workshop was designed to provide participants with a better understanding of current trends and practices as well as an opportunity for audit partners to exchange views and experiences in their continuing efforts to manage high-quality audit practices," says Nick Fraser, Workshop Chairman and Chair, Transnational Auditors Committee.

Every member of the Forum must follow international professional standards on quality control at the firm level and for each transnational audit engagement: International Standard on Quality Control 1 (ISQC 1) and International Standard on Auditing 220 (ISA 220) as issued by the International Auditing and Assurance Standards Board. These standards require firms to establish a system of quality control to provide them with reasonable assurance that the firm and its personnel comply with professional standards and regulatory and legal requirements, and that reports issued by the firm or engagement partners are appropriate in the circumstances. Additionally, Forum members must conduct regular globally coordinated internal inspection reviews to monitor adherence to these standards across their networks.

"The requirement for Forum members to conduct these globally coordinated inspections is a unique and challenging obligation of Forum membership, which is just one example of the Forum's ongoing commitment to facilitating continuous improvements in the quality of transnational audits worldwide," concludes David Maxwell, Chair, Forum of Firms.

About the Forum of Firms
The Forum of Firms (www.ifac.org/Forum_of_Firms) is an association of networks of international accounting firms that perform transnational audits. Members of the Forum have committed to adhere to and promote the consistent application of high-quality audit practices worldwide, including the use of International Standards on Auditing, and the maintenance of appropriate quality control standards in accordance with International Standards on Quality Control issued by the International Auditing and Assurance Standards Board. Through their organizations, members also conduct globally coordinated internal quality assurance reviews on a regular basis and have policies and methodologies that conform to the International Federation of Accountants' Code of Ethics for Professional Accountants. The Transnational Auditors Committee is the Executive Committee of the Forum of Firms and a committee of the International Federation of Accountants.

Thank you for inviting me here today. I would like to compliment UNCTAD on its initiative in organizing this seminar today. I would also like to personally recognize Yoseph Asmelash for his long-time, broad, and continued support of IFAC. Thank you, Yoseph.

IFAC plays a number of roles in the global financial system, although it is principally recognized for setting high-quality standards in international public sector accounting, auditing, education, and ethics through its independent boards. Our less recognized role--and one that will be even more important in the years ahead--is as the facilitator and driver of adoption and high-quality implementation. This is where IFAC can help change the game--moving from the goal of convergence to implementation of standards.

Before we can move to implementation, the world must agree on a single set of standards and stop using scarce resources debating whether there SHOULD be a single set of standards. In the case of accounting standards for the private sector, and, indeed, even for auditing standards, this debate has not yet been settled.

But in the case of public sector accounting, there is not much debate about which standards should be used. The International Public Sector Accounting Standards (IPSASs) were developed by the International Public Sector Accounting Standards Board (IPSASB), under the leadership of Chairman Mike Hathorn, who will be speaking to you in a moment. The IPSASs are a complete set of high-quality standards that governments at all levels can--and should--be using to report to taxpayers, their elected legislature, and borrowers around the world.

To promote awareness and understanding of the newly clarified1 International Standards on Auditing (ISAs), the International Auditing and Assurance Standards Board (IAASB) released today a series of "ISA Modules" focusing on some of the new and more significantly revised ISAs. Developed by IAASB staff, each of these modules combines short video presentations and accompanying slides that explain the key principles of, and major changes in, individual ISAs, including the implications for audits of small- and medium-sized entities (SMEs).

"Promoting the adoption and successful implementation of ISAs is one of the IAASB's most important goals. These new tools will help us to move closer to that goal by providing support to those responsible for adopting and implementing the clarified ISAs, trainers, and auditors in applying them in practice," explains Arnold Schilder, Chairman of the IAASB.

This new resource includes modules that provide an introduction to, and an overview of, the clarified ISAs, including ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing, and audit documentation and SME audit considerations. Additional modules cover ISAs that address related parties, auditing accounting estimates, including fair value estimates, communication with those charged with governance, and communicating deficiencies in internal control.

"Now is the time to address the necessary aspects of implementation. This includes developing or updating training programs and considering audit methodology changes," emphasizes IAASB Technical Director James Gunn, adding, "Successful implementation of the clarified ISAs will depend on being well prepared when they come into effect."

The ISA Modules are available to download free of charge from the IAASB Clarity Center on the IFAC website (web.ifac.org/clarity-center/support-and-guidance). The IAASB encourages IFAC members, associates, regional accountancy bodies, and firms to use these materials and to promote their availability to their members and employees.  

About the IAASB and IFAC
The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance.

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.

¹ The Clarity Project, completed by the IAASB in March 2009 resulted in the issuance of 36 ISAs and one International Standard on Quality Control in a new style that is easier to understand, translate, and implement. In some cases, other major revisions to the content were made as well. The new set of clarified ISAs goes into effect for audits of financial statements for periods beginning on or after December 15, 2009. In practical terms, this means that they will be effective for 2010 year end audits.

Some small and medium-sized enterprises (SMEs) may have access to more credit down the road, but will have to pass more rigorous tests to demonstrate their creditworthiness, according to the findings of a global survey of banks conducted by The Banker magazine in association with the International Federation of Accountants (IFAC). The survey results, released today in a supplement on supporting small and medium-sized companies in the October issue of The Banker, also confirmed the critical role that accountants play in providing information that influences lender decision making. Some small and medium-sized enterprises (SMEs) may have access to more credit down the road, but will have to pass more rigorous tests to demonstrate their creditworthiness, according to the findings of a global survey of banks conducted by The Banker magazine in association with the International Federation of Accountants (IFAC). The survey results, released today in a supplement on supporting small and medium-sized companies in the October issue of The Banker, also confirmed the critical role that accountants play in providing information that influences lender decision making.

"Accountants have a long-standing history as the trusted advisors for SMEs. To continue to fulfill this role, accountants should be proactive in advising their SME clients about lending options and requirements," states IFAC Chief Executive Officer Ian Ball. "The survey results provide useful information to assist both accountants and SMEs."

The survey showed that over 20 percent of the more than 350 bankers who answered questions about the future indicated that they would raise the number of new loans and increase loan amounts to existing SME clients over the next two years. Very few respondents, just 2 percent, said they would restrict loans to SMEs. However, bankers expect SMEs to provide more comprehensive information in their loan applications. Survey respondents indicated that they will increasingly look at cash-flow information, collateral, and customer history with the bank when considering loan applications. Financial statements, key risk indicators, and industry trends are also among the key information banks are focused on when making loan decisions.

Lenders also highly value audited financial statements. Two-thirds of the respondents indicated that their lending policies require some form of assurance on the entity's financial statements from an external accountant, and audited financial statements are preferred by most  respondents. In addition, another 60 percent of respondents said that accountant involvement in an SME's business would significantly and positively influence their lending decisions.

"IFAC is dedicated to helping accounting firms meet the assurance and other needs of the small business community," emphasizes IFAC President Robert Bunting. "We will also continue to take the pulse of the SME community through our outreach initiatives, particularly those of our Small and Medium Practices Committee."

Brian Caplen, editor of The Banker, says: "It was very exciting to work with IFAC on this project. The health of the small and medium-sized business sector is critical to the global economy and it is very important for banks to understand their needs. We hope that the survey leads to a better understanding between banks and their clients."

About the Survey
The online survey was conducted by The Banker between August 21 and September 15, 2009. Over 500 bankers responded to the survey; there were 146 complete responses, and the remainder was partial responses. The survey sample included banks in over 80 countries. The banks ranged in size from those with total assets of under US$100 million to over US$100,000 million. To view the survey results, go to www.ifac.org/financial-crisis/smp-sme-resources.php or see the October issue of The Banker.

About IFAC
IFAC (www.ifac.org), the global organization for the accountancy profession with 157 members and associates in 123 countries, promotes the adoption and implementation of international standards and develops guidance to foster high-quality practice by professional accountants working in business, public practice, government, and education.

About The Banker
The Banker is the monthly magazine of the international banking and finance industry. Part of the Financial Times group, The Banker has navigated its way through 83 years of banking coverage from the Wall Street Crash of 1929 to the financial crisis of 2008 with the same reputation for accuracy, authority and integrity. Read in more than 100 countries around the world, The Banker delivers unique insights and analysis to the world's leading CEOs, CFOs, CIOs, Corporate Treasurers and Central Bank Governors.

The International Federation of Accountants (IFAC) supports the goals expressed by G-20 Leaders at the Pittsburgh Summit last week to advance "a framework for strong, sustainable, and balanced growth," which includes reform of executive compensation packages,  the adoption of a single set of high-quality global accounting standards, and increased resources for the World Bank and international development banks. IFAC recommends that these goals remain priorities and that G-20 Leaders act on them at a national level.

Two issues at the top of IFAC's agenda, which were reflected in its submission to the G-20 finance ministers in July, are the need for governments to address corporate governance issues and to move ahead on implementing common global standards not only for accounting, but also for auditing and for auditor independence.

"IFAC shares the G-20's view that systems of remuneration should provide incentives consistent with long-term growth and corporate performance," emphasizes Robert Bunting, IFAC President, adding, "The time has come to act on that view."

IFAC has recommended that the G-20 nations adopt and implement the Organisation for Economic Co-operation and Development's (OECD's) Principles of Corporate Governance and that they ask the OECD to address the design of remuneration systems within its corporate governance framework. In addition, IFAC has strongly urged governments to support an increased role for corporate audit and compensation committees and for ensuring that members of these committees have the appropriate expertise.

As part of its governance recommendations, IFAC has called for "competency requirements for those preparing financial statements." IFAC believes these competency requirements should apply not only to those working in listed companies, but also to those preparing governmental financial reports. This is especially critical as governments assume new forms of assets and liabilities as a result of their bailouts and stimulus plans. Greater transparency by governments, made possible through high-quality financial reporting, will help keep taxpayers informed and boost investor confidence.

"Governments can make major strides in enhancing their fiscal management and strengthening their financial reporting by adopting and implementing International Public Sector Accounting Standards (IPSASs)," emphasizes IFAC Chief Executive Officer Ian Ball. "Additionally, the adoption and consistent application of IPSASs will facilitate more reliable cross-national financial comparisons."

In addition to supporting global adoption of IPSASs, IFAC has long advocated the adoption of International Financial Reporting Standards and International Standards on Auditing. Global standards will create a level playing field in the interpretation and exchange of financial information and contribute to economic and financial stability. Similarly, the adoption of global standards on auditor independence, such as those expressed in the Code of Ethics for Professional Accountants, will help to sustain trust in capital markets.    

IFAC also recognizes the key role the World Bank plays in helping to achieve more balanced economic growth and applauds the G-20 nations for their commitment to it. IFAC continues to work closely with the World Bank to develop and strengthen the accountancy profession, particularly in emerging countries. A strong accountancy profession, supported by high-quality, robust standards, is a vital component of a country's financial system.

To view IFAC's recommendations to the G-20, go to www.ifac.org/financial-crisis. For the results of the G-20 Summit, visit The Pittsburgh Summit 2009.

About IFAC
IFAC (www.ifac.org), the global organization for the accountancy profession with 157 members and associates in 123 countries, promotes the adoption and implementation of international standards and develops guidance to foster high-quality practice by professional accountants working in business, public practice, government, and education.

Good morning. As president of the International Federation of Accountants, IFAC, I want to thank you for joining us here this morning as we speak of issues that are critical not only to Brazil and Latin America but to the world. In addition, I want to extend greetings to our CReCER partner organizations - the World Bank, Inter-America Development Bank, IFAC member CFC and the six largest accounting networks - for all their work in the preparation of this week's program.

As I was preparing to travel to Brazil, the IFAC staff has helped by providing me background information about the economy and other issues that quite relate to the country I am visiting.  One of the things that step out in my mind about the background information I have received was the motto of São Paulo, "Non ducor, duco"; which as I understand correctly, means, "I am not led; I lead." This speaks directly to the independence and the spirit and leadership in São Paulo and its people, and it forms the perfect background for me today, in choosing the themes that I would like to share with you. 

There are four areas/four themes, of leadership that I would like to discuss. The first is: Speaking out as the global voice of the profession. The next is: Showing the way to an improved financial infrastructure. The third concerns: Supporting SMEs and micro-entities that need extra care; and, last, is: Sharing tasks when collaboration is appropriate.

"The accounting profession can and should take a leadership role in helping the world steer its way out of the global financial crisis," International Federation of Accountants (IFAC) President Robert L. Bunting told the audience gathered in São Paulo, Brazil, for the third annual CReCER conference (Spanish acronym of Accounting and Accountability for Regional Economic Growth).  "At this crossroad for the world economy, this means raising our voice about what we know best-including the capital markets, government accountability, and the small and midsize businesses we call SMEs."

Mr. Bunting reminded the audience that every kind of entity needs the financial information that high-quality standards provide as we move toward recovery from the recession. Businesses in Latin America and the Caribbean often need to prove their economic viability as business partners for new opportunities in the Middle East and China, or for ongoing ones in this hemisphere. Governments need to confirm their fiscal health for the capital markets or for membership in regional economic organizations.

"Governments worldwide must follow the same high standards of financial reporting as their private sector counterparts if we are to believe the economic picture they paint-and to avoid this kind of global meltdown in the future," Mr. Bunting said. "The broad-based adoption of International Public Sector Accounting Standards-which IFAC has also recommended strongly to the G-20 Leaders-is critical to improving government transparency and accountability, in light of the unprecedented takeovers, lending, guarantees, and bailouts of major market institutions, banks, and companies that have taken place," Mr. Bunting added.  He also noted that IFAC is working with the World Bank to develop and strengthen the accountancy profession in developing and emerging economies as a key step in achieving financial stability.

Mr. Bunting also spoke out about the importance of supporting small and midsize businesses and the smaller accountancy firms that serve them in recovery from the recession. "The people behind Latin America's SMEs are vital to creating sustainable growth, jobs, and wealth," he said, because "they turn innovation and agility into new products and services. The OECD says they account for most businesses in all countries and are a major source of new jobs. Yet, they are often a forgotten voice in the regulatory and public policy dialogue. We cannot let this happen."

The CReCER conference, September 23-25, 2009, is designed to increase awareness of the critical importance of sound financial reporting and auditing for the development of a well-functioning market economy and of an efficient public sector-the cornerstones of equitable and sustainable economic development. Over 800 individuals attended, including representatives of the accountancy profession, governments, and the donor community. IFAC, the World Bank, and the Inter-American Development Bank organized the first CReCER event in June 2007, and are joined by IFAC member Conselho Federal de Contabilidade and the six largest accounting networks in the preparation of this year's event, along with other sponsors.
 
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.

Good morning, ladies and gentlemen. I'm delighted to be here today to participate in this special anniversary event. My congratulations to Chief Executive Vickson Ncube, President Koos du Toit of ECSAFA, your past presidents and CEOs, and to you, members, on this milestone in your organization's history. I would also like to recognize the hosting institutes and our IFAC colleagues, the South African Institute of Chartered Accountants and the South African Institute of Professional Accountants, and the chief or platinum sponsor, ACCA, as well as all the other sponsors who have contributed in one way or another to making this occasion a success.

My brief remarks today will focus on looking ahead, to consider what IFAC can--and already does--contribute to the Africa of tomorrow through  sustainable development. I suppose that if you walked down a main street in Johannesburg and asked someone at random what is needed for sustainable development in this country, you might find quite a few people who would say "more sports" and, in particular, "success for Bafana Bafana." But there was also the unexpected visit of the Indian Cricket Premiere League, which provided a big boost to the South African economy, particularly for the travel and tourism sector. And it was followed by another welcome event, this time the Confederations Cup. I also note that construction is moving ahead for next year's FIFA World Cup, which should continue to highlight South Africa's unique attractions, as well as spur its economy.

And yet, man or woman does not live by football alone--not in South Africa, as one of the G-20 nations, and certainly not in other areas of the continent that have much further to go in developing a sustainable economy. What they need is people and innovation, and an economic environment that encourages these entrepreneurs to succeed with their ideas, for this is key to building a sustainable business and social environment.

The International Federation of Accountants (IFAC) and the International Valuation Standards Council (IVSC) have signed a Memorandum of Understanding designed to enhance their respective impact on issues surrounding valuations-particularly those related to improving the consistency of global valuation standards affecting the preparation and audits of financial reports.

Michel Prada, Chairman of the Board of Trustees for the IVSC, states, "Valuation standards, coupled with clear accounting and auditing principles, are key to the efficiency of the global market economy. This Memorandum of Understanding demonstrates the cohesive and united approach of the IVSC, IFAC, and International Auditing and Assurance Standards Board (IAASB) to maintaining standards as global markets continue to develop."

"The current economic crisis has highlighted the challenges associated with the valuation of assets and liabilities by both preparers and auditors," says Bob Bunting, President of IFAC. "I am delighted that our two organizations will seek ways in which we can work together in serving the public interest. As a first step, I am encouraged that the IVSC will appoint a representative to serve on the consultative advisory group of the IAASB, which works to strengthen public confidence in the auditing profession by establishing high-quality, global auditing, assurance, quality control, and related services. I look forward to developing other areas of collaboration with the IVSC in the coming months."

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.

About the IVSC
The IVSC (www.ivsc.org) is charged with developing robust and transparent procedures for performing international valuations through a single set of globally recognized valuation standards, acceptable to the world's capital markets organizations market participants and regulators, which will meet the challenges of a fast-changing global economy.   The governance structure of the IVSC, a non-profit organization incorporated in the U.S., includes two independent technical Boards-the International Valuation Standards Board and the International Valuation Professional Board-and a global Board of Trustees responsible for the overall strategic direction and funding of the IVSC. The IVSC works co-operatively with national professional valuation institutes, users and preparers of valuations, governments, regulators, and academic bodies, all of whom can become members of the IVSC and have an important role to play in advising the boards on agenda decisions and priorities in the work of the IVSC.

This IAASB Staff Questions & Answers publication highlights how the design of the ISAs issued under the Clarity Project enables them to be applied in a manner proportionate with the size and complexity of an entity.