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International Federation of Accountants IFAC Member Body Compliance Program Update Szymon Radziszewicz Senior Technical Manager, Compliance Program IAASB Meeting New York March 18, 2010 Compliance Program Map for Today • Background • Where we are today • Where are we heading – Challenges & Success Factors – Basis of ISA Adoption Chart – SMO Revisions Framework for Professional Accountancy Body Statements of Membership Obligations (SMOs) • SMO 1 Quality Assurance • • • • International Education Standards International Standards on Auditing International Code of Ethics International Public Sector Accounting Standards Investigation and Discipline International Financial Reporting Standards SMO 2 SMO 3 SMO 4 SMO 5 • SMO 6 • SMO 7 Benchmarking and Strategy Assessing Compliance • Part 1 – Self-assessment: Overview of regulatory and standard-setting framework in a member’s jurisdiction • Part 2 – Self-assessment: benchmarking against the 7 SMOs • Part 3 – Own Strategy: Action Plans for continuous improvement Sneak Peak into the Future Compliance Program 201X • Information Gathering Questionnaire • Strategy for Ongoing SMO Compliance • Monitoring • Enforcement Status in Numbers Status of Preparation of Action Plans as of March 17, 2010 • 81 – Published Action Plans • 36 – Drafts received and under review • 39 – In progress but no submitted draft • 2 – Suspensions • 1 – Expulsion Recommendation Status in Pictures – Beginning of the Road Monitoring of Published Action Plans • Soft updates – Done after six months – Based on interviews with key individuals Obtain understanding of current progress Encourage continuing communication Offer to be of further assistance – Memorandum prepared for archives and CAP review Monitoring of Published Action Plans • 26 completed as of March 17, 2010 – Overall member bodies generally remain on track – Some delay caused by changes in regulatory environment or change in priorities – Also noted a number of positive developments • Annual progress reports – Include submission of updated Action Plans – 11 completed or actively in progress Challenges Overriding Lessons Learned • Member bodies operating in developing countries generally do not have the financial and technical means to achieve all desired actions • Adoption of international standards and practices is relatively easy; successful implementation can be extremely difficult • The basis of adoption of international standards can have an impact on the quality of implementation. Key to Achieve Desired Actions Need for Financial and Technical Resources • Meaningful execution of Action Plan depends on: – Ability of developing bodies to clearly communicate their challenges, required actions, and need for resources – Willingness of national government and donor agencies to provide support and financial resources – Development of useful implementation tools by the DNC and standard setters – Support of regional organizations and developed bodies serving as mentors http://web.ifac.org/isa-adoption/chart Developments Program to Review the SMOs (2010-2012) • Clarification and increased consistency including – “No less stringent standards” SMO 4 (Ethics) – Statement of applicability in SMO 7 (IFRS & IFRS-SMEs) • Member body governance practices • Corporate governance (OECD principles)? • Review of QA and I&D – Public oversight for auditors of PIEs? Thank you www.ifac.org/ComplianceProgram March 2010