The Consultative Advisory Group (CAG) of the International Auditing and Assurance Standards Board (IAASB) has announced that its meetings are now open to the public. Its next meeting is scheduled for May 11-12 in Paris.

The IAASB CAG is comprised of organizations that are interested in the development of high quality international standards on quality control, audits, reviews and other assurance engagements designed to serve the public interest. Members include international organizations that represent users and preparers of financial statements and regulators. They provide input to and assist the IAASB by advising on its work program, including project priorities, and offering technical advice on projects as items evolve and on other matters of relevance to the IAASB's activities.

Over the past year, the Chairman of the CAG has brought the representation of organizations in the membership of the CAG to 25 - adding new members so that it could harness the views of a wider constituency of stakeholders, both geographically and by professional background, in the auditing process. An important feature is the accountability of the IAASB to the CAG: IAASB project task forces are required to consider significant points made in the CAG discussions and respond in writing to the CAG, explaining how the matters raised have been dealt with.

In developing this process, the meetings of the CAG are attended by the leadership of the IAASB and of the relevant task forces. "Since becoming Chairman, I have planned for the opening of the CAG meetings to the public," says David Damant, Chairman of the CAG. "I have already noted the high-level transparency with which the IAASB operates and this step seems essential to me if organizations, which rely on the auditors and the standards they use, want to have confidence in the full standard-setting process."

Opening the CAG meetings to the public will provide organizations other than the CAG member organizations, and the general public, an opportunity to observe the discussions and follow the various points of view put forward. This may assist them in preparing responses to documents issued by the IAASB for public consultation. Attendance at the CAG meeting can also help individuals or organizations to better understand how the public interest is represented in the development of international auditing and assurance standards.

John Kellas, Chairman of the IAASB, emphasizes: "The CAG is an integral and important part of the IAASB's formal process of consultation. This step further enhances the transparency of that process."

In addition to the May 2006 meeting, the CAG will meet September 11-12 in Toronto. The meeting venues and a registration form to be completed by public observers are available on the IAASB website. The agenda and material for each meeting will be posted to this website two weeks in advance of the meeting.

Notes: IAASB Consultative Advisory Group

The IAASB CAG is independent of the International Federation of Accountants (IFAC). A list of the CAG member organizations as at December 31, 2005 is attached to this press release. The objective and the scope of activities of the CAG, with the rules for membership, and operating procedures are set out in its terms of reference, which are available on the IAASB website.

International Auditing and Assurance Standards Board

The objective of the IAASB, an independent standard-setting board within IFAC, is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession.

Public Interest Oversight Board

The international Public Interest Oversight Board (PIOB) for accountancy, established in 2005, oversees IFAC's public interest activities with the objective of increasing the confidence of investors and others that such activities, including the setting of standards, are properly responsive to the public interest. The PIOB oversees the activities of the IAASB and of the CAG and, as one element of this oversight, establishes the criteria for their due processes and working procedures. The opening of the CAG meetings to the public is in line with these criteria. 

IAASB Consultative Advisory Group Members (As at December 31, 2005)

• Asian Financial Executives' Institutes
• Basel Committee on Banking Supervision
• CFA Institute
• Eastern, Central and Southern African Federation of Accountants
• European Commission
• European Federation of Accountants and Auditors for SMEs
• European Financial Executives' Institutes
• Fédération des Experts Comptables Européens
• Foundation Institute Capixaba of Research in Accounting, Economy, and Finance
• Information Systems Audit and Control Association
• Institute of Internal Auditors
• Institute of International Finance
• International Accounting Standards Board
• International Actuarial Association
• International Bar Association
• International Corporate Governance Network
• International Organization of Securities Commissions
• International Organization of Supreme Audit Institutions
• Islamic Financial Services Board
• Japan Securities Dealers Association
• National Organization for Financial Accounting and Reporting Standards in Russia
• North American Financial Executives' Institutes
• United Nations Conference on Trade & Development
• World Bank
• World Federation of Exchanges

The International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) is working to improve both the quality and uniformity of financial information reported by public sector entities around the world. In pursuit of this objective, the IPSASB has issued a Consultation Paper entitled Accounting for Heritage Assets under the Accrual Basis of Accounting. The Consultation Paper includes a Discussion Paper, Heritage Assets: Can Accounting Do Better?, recently published by the United Kingdom's Accounting Standards Board (ASB).

Accounting for heritage assets is an area of particular interest for governments and public sector entities worldwide. Many assets of significant cultural, artistic and historical importance and outstanding natural beauty are controlled by public sector entities, including items and sites which are emblematic of particular nations. Diverse approaches to accounting for heritage assets have been developed by different standard-setters worldwide.

"The IPSASB recognizes the need to develop at an international level requirements and guidance on accounting for heritage assets and to harmonize those requirements across national jurisdictions," says IPSASB Chair Philippe Adhémar.

So that it can use its resources efficiently, the IPSASB has decided to benefit from the development work of some national standard setters, where possible, as a starting point in its approach to particular topics. The UK ASB Discussion Paper is a case in point. The proposals in the paper do not necessarily reflect the views of the IPSASB. However, they do suggest potential solutions to challenges in accounting for heritage assets that are likely to be faced in many jurisdictions reporting on the full accrual basis or in the process of migrating to that basis. The IPSASB Consultation Paper provides the international financial reporting community with the opportunity to respond to approaches that are being considered by the national standard setter. Responses received will be considered by the IPSASB as it commences its own due process.

How to Comment

Comments are requested by June 30, 2006. The Consultation Paper may be viewed by clicking here. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record.

About IFAC

IFAC is the worldwide 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's current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC, through its independent standard-setting boards, sets ethics, auditing and assurance, and education standards. It also issues guidance to encourage high-quality performance by professional accountants in business.

At a meeting hosted by the International Federation of Accountants (IFAC) on February 20-21 in London, chief executives of accountancy organizations worldwide expressed a strong desire for improvements in the quality of governmental financial reporting and financial management and recognized the benefits this would generate for all taxpayers in all countries.

IFAC, the global organization for the accountancy profession representing over 160 accountancy organizations with more than 2.5 million accountants in public practice, education, government service, industry and commerce, convened the meeting with 35 of its member organizations and regional accountancy organizations to discuss strategic priorities for the profession over the next five to 10 years.

Participants agreed that the international profession must take a strong role in advocating that governments should follow standards in line with those to which they expect companies in the private sector to adhere and, in particular, to promote the use of IFAC's International Public Sector Accounting Standards as a means to strengthen governmental financial accountability. The group also agreed that there was a strong need to strengthen enterprise governance, through, for example, greater numbers of professional accountants on Boards and in CFO positions. This, in turn, can contribute to enhanced corporate performance and economic growth and development.

Another critical issue requiring the attention of the global profession is the recruitment, training and retention of accountancy professionals. "Shortages in the availability of qualified professional accountants and shortages in the quality of potential recruits can seriously affect the production of quality financial information - information which is critical to investors. It can also affect business development, jeopardizing economic growth," emphasized IFAC President Graham Ward. "Better communicating the value of accountancy qualifications and career opportunities and reducing the personal financial risks faced by accountants in practice and in business through liability reform are among the ways in which we can make the profession more attractive and address recruitment and retention issues."

About IFAC

IFAC is dedicated to serving the public interest by strengthening the worldwide accountancy profession and contributing to the development of strong international economies. The organization sets international standards of ethics, auditing and assurance, education and public sector accounting and issues good practice guidance and studies to encourage high quality performance by professional accountants in business.

The International Federation of Accountants (IFAC), the global organization for the accountancy profession, is seeking nominations for a public member for the International Ethics Standards Board for Accountants and for a public member for the International Public Sector Accounting Standards Board, independent standard-setting boards within IFAC. Individuals, organizations, accountancy firms and IFAC member and regional accountancy bodies may submit nominations for these two public member positions by April 15, 2006. Public members are expected to act in the public interest and must be seen to be independent of any special interests and seen to be acting to represent society as a whole.

The International Ethics Standards Board for Accountants develops high-quality ethical standards and other pronouncements for professional accountants around the world. The IFAC Code of Ethics for Professional Accountants and Interpretations apply to all professional accountants, including those in public practice, business, education, and the public sector. The Code serves as the foundation for codes of ethics developed and enforced by member bodies, and no member body of IFAC or firm issuing reports in accordance with International Standards on Auditing may apply less stringent standards than those stated in the Code.

The International Public Sector Accounting Standards Board (IPSASB) develops high-quality accounting standards for use by governments and other public sector entities around the world in the preparation of general purpose financial statements. Its aim is to enhance the quality and transparency of public sector financial reporting and strengthen public confidence in public sector financial management. The IPSASB also supports the convergence of international and national public sector accounting standards and the convergence of accounting and statistical bases of financial reporting where appropriate.

Nominees for either public member position must have an appropriate level of knowledge about the work of the respective board, although they need not have a professional accountancy designation. See the Call for Nominations for more information, including expected time commitments. Organizations and individuals interested in submitting candidates may do so through the electronic Candidate Information Form, available at https://www.ifac.org/NominationForms.

The search for public members for IFAC's standard-setting boards is part of a broad-based and transparent IFAC nominations process designed to identify the most qualified candidates possible. All members of these groups are required to sign a declaration committing to act with integrity and in the public interest in their role within IFAC.

IFAC is dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Its current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards on ethics, auditing and assurance, education, and public sector accounting. It also issues guidance to encourage high-quality performance by professional accountants in business.

The unprecedented growth in population and consumption, global resource depletion, and broadening expectations regarding social and environmental accountability are among the reasons for an increased focus on sustainability by leaders worldwide.

Given the increasing role of accountancy firms in preparing assurance reports on sustainability, the International Federation of Accountants (IFAC) has issued a consultation paper that explores the assurance aspects of the Global Reporting Initiative's (GRI's) proposed new Sustainability Reporting Guidelines (G3). Last month, the GRI, which develops and disseminates global reporting guidelines on the economic, environmental and social performance of organizations, released draft new guidelines designed to enhance the comparability, clarity, ease of use, and assurability of sustainability reports. The IFAC consultation paper, Assurance Aspects of G3 - The Global Reporting Initiative's 2006 Draft Sustainability Reporting Guidelines, explores issues in the proposed G3 Guidelines that specifically relate to assurance reporting.

The IFAC consultation paper seeks to stimulate interest among professional accountants in the GRI's proposed new reporting guidelines - especially those aspects related to assurance reporting; to encourage accountants to review and provide comments to the GRI; and to gauge whether G3 would be suitable as criteria for assurance engagements. The consultation paper is also designed to provide IFAC's independent International Auditing and Assurance Standards Board (IAASB) with feedback on the application of its International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, to sustainability reporting. The paper is aimed primarily at professional accountants with some familiarity with sustainability assurance and assumes a certain knowledge of GRI Guidelines, the IAASB's assurance framework and ISAE 3000. The IFAC consultation paper can be downloaded from its website at https://www.ifac.org/store/.

How to Comment

IFAC encourages its member bodies as well as professional accountants in business and public practice to review the GRI's draft G3 Guidelines and to provide comments directly to the GRI by March 31, 2006. For more information, to download the G3 Guidelines and to submit comments, visit https://www.grig3.org. Professional accountants and IFAC member bodies are asked to send a copy of their comments to IFAC to the attention of michaelnugent@ifac.org. These comments will assist IFAC in understanding the views of professional accountants on the proposed Guidelines and assist in the development of a possible IFAC response to G3, a further consultation paper, or possible future revisions to the IAASB's assurance framework and ISAE 3000.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Its current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. IFAC, through its independent standard-setting boards, sets international standards on ethics, education, and public sector accounting. It also issues guidance to encourage high-quality performance by professional accountants in business.

Taxes are the major source of revenue for most governments, but internationally agreed requirements for accounting for them in general purpose financial statements have not yet been developed. To deal with this major gap in international accounting requirements for governments, the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC) has issued a proposed standard on the financial reporting of revenue from non-exchange transactions, including taxes and transfers.

The exposure draft (ED) of the proposed International Public Sector Accounting Standard (IPSAS), Revenue from Non-Exchange Transactions (Including Taxes and Transfers), deals with a range of matters critical to government financial reporting of taxes, including the basis on which a wide range of taxes should be recognized and how they should be measured. The ED also addresses accounting for other major sources of non-exchange revenue for public sector entities, including transfers from other governments and international organizations, and gifts and donations. The ED also provides guidance on how conditions and restrictions on the use of transferred resources are to be reflected in the financial statements.

"The ED is the result of three years of intense work with the contribution of public finance specialists. It reflects present priorities of the IPSASB with respect to public sector specific issues. The ED proposes the establishment of an international benchmark for the financial reporting of taxes and other major non-exchange revenues of governments. Compliance with the requirements proposed in the ED will enhance the quality, comparability and transparency of financial reporting by public sector entities around the world," says IPSASB Chair Philippe Adhémar.

Given the importance of the subject of this ED to public sector reporting entities, a five-month comment period has been provided to ensure that all constituents have sufficient time to consider and respond to the proposed requirements.

How to Comment

Comments on the ED are requested by June 30, 2006. The ED may be viewed by going to https://www.ifac.org/EDs. Comments may be submitted by email to publicsectorpubs@ifac.org. They can also be faxed to the attention of the IPSASB Technical Director at +1 (212) 286-9570 or mailed to IFAC, 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IFAC

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Its current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international public sector financial reporting standards through the IPSASB, IFAC sets international standards of ethics, auditing and assurance, and education. It also issues guidance to encourage high-quality performance by professional accountants in business.

Recognizing the critical role of ethical values and standards on protecting the public interest, the International Federation of Accountants (IFAC) has developed new proposed guidance for corporate accountants and management worldwide. Its Professional Accountants in Business (PAIB) Committee has issued an exposure draft, Guidance for the Development of a Code of Corporate Conduct, proposing guidance to assist professional accountants and others in establishing and implementing codes of conduct in their organizations. The exposure draft may be viewed by going to https://www.ifac.org/EDs.

"The goal of this proposed new guidance is to support sound corporate governance policies worldwide," emphasizes IFAC President Graham Ward. "The publication draws greater attention to the need for corporate codes of conduct and provides practical guidance on the scope and implementation of such codes."

The proposed guidance highlights the benefits of an effective code of conduct and identifies the professional accountant's role in the development, monitoring, reinforcement, and reporting of such codes in their organizations. To assist in the creation of codes of conduct, the guidance includes information on presentation and content, organizational and management challenges, and implementing a code of conduct in a global organization.

The new guidance identifies a three-stage approach to the development and implementation of codes of conduct: managing for compliance, managing stakeholder relations and creating a values-based organization, in which the values and principles permeate the organization and are enduring. 

"Effective codes of conduct are a vital component of an organization's control systems. This new publication will enable professional accountants, who are responsible for internal control and risk management, to work with senior management to develop such codes, which, in turn, will support the control, direction and evaluation of their organizations' performance," states PAIB Committee Chair Bill Connell. "It is intended not only for professional accountants working in business and industry, but also for those in the not-for-profit and government sectors."

How to Comment

Comments on the exposure draft are requested by April 15, 2006. These comments will assist the Professional Accountants in Business in modifying and/or augmenting the guidance to improve its usefulness and relevancy. Comments may be submitted by email to EDComments@ifac.org. They can also be faxed to the attention of the PAIB Committee Technical Manager at +1-212-286-9570 or mailed to the PAIB Committee Technical Manager at 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record.

About IFAC

IFAC is the worldwide 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's current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to developing guidance to support professional accountants in business, IFAC, through its independent standard-setting boards, sets international standards of ethics, auditing and assurance, education and public sector accounting.

The involvement of related parties, such as directors, owners, and management, in major corporate scandals encouraged the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) to review its current auditing standard on the subject. The IAASB has just issued an exposure draft (ED), proposed International Standard on Auditing (ISA) 550 (Revised), Related Parties, as a result of its review, and is inviting comments on proposed requirements for auditors regarding the audit of related party relationships and transactions.

The current standard requires the auditor to perform certain specified procedures. The proposed standard would extend current practice by requiring the auditor to obtain an understanding of the nature and business rationale of an entity's related party relationships and transactions sufficient to identify, assess and respond to the risks of material misstatement resulting from them. It also places greater emphasis on the difficult task for the auditor of attempting to identify related party relationships and transactions not identified or disclosed by management. The proposed standard places new emphasis on evaluating the effects of related party relationships and transactions on the financial statements, even in circumstances where the financial reporting framework does not establish related party accounting or disclosure requirements.

John Kellas, Chairman of the IAASB, explains: "The proposed standard gives greater recognition to the particular risks associated with related parties and calls on the auditor to do more work to identify related parties and the rationale for the transactions between them and the audit client."

How to Comment

Comments on the exposure draft are requested by April 30, 2006. The exposure draft may be viewed online. Comments may be submitted by email. They can also be faxed to the attention of the IAASB Technical Director at +1-212-286-9570 or mailed to the IAASB Technical Director at 545 Fifth Avenue, 14th Floor, New York, NY 10017, USA. All comments will be considered a matter of public record and will ultimately be posted on IFAC's website.

About IAASB and IFAC

The objective of the IAASB, an independent standard-setting board within IFAC, is to serve the public interest by setting high quality auditing and assurance standards and by facilitating the convergence of international and national standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. The international Public Interest Oversight Board* oversees the activities of the IAASB and, as one element of that oversight, establishes the criteria for its due process and working procedures.

IFAC is the worldwide organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Its current membership consists of over 160 professional accountancy bodies in 120 countries, representing more than 2.5 million accountants in public practice, education, government service, industry and commerce. In addition to setting international auditing and assurance standards through the IAASB, IFAC sets ethics, education, and public sector accounting standards and develops guidance to encourage high-quality performance by professional accountants in business.

* Note to Editors The international Public Interest Oversight Board was formally established in February 2005 to oversee IFAC's auditing and assurance, ethics, and education standard-setting activities as well as the IFAC Member Body Compliance Program. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IAASB, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.