Part I by Paul Thompson, Deputy Director, SME & SMP Affairs, explores the challenges currently faced by SMPs, provides regulators' observations, and offers tips for audit efficiency.

Part II  with IFAC SMP Committee Member Christina Foo covers global insights, general implications for SMPs, new service offerings, and practice management. 

The Call for Applications:Chair of the International Ethics Standards Board for Accountants (IESBA) was issued today.

The Chair will lead the strategic direction of the IESBA, serving on a remunerated basis for a minimum of 150 days per year beginning January 1, 2015. He/she will work closely with the IESBA senior staff to facilitate the deliberative and consultative processes that underpin the authority of the IESBA and the legitimacy of its standards and activities. In addition, the Chair will be involved in developing and maintaining effective relationships with national standard setters, regulators, and other key stakeholders.

The successful candidate should have effective leadership, communication, and strategic skills; demonstrated technical and professional competency; and a commitment to the IESBA and its mission to protect the public interest. He or she will have very significant and senior experience. Exposure to professional ethical issues at a national, regional, or international level would be an asset, as would familiarity with regulatory and standard-setting processes. Only individuals who possess the highest integrity will be considered. The preferred candidate is an individual who is not a professional accountant. Candidates who are professional accountants will need to demonstrate their independence from the accountancy profession.

The IESBA Chair reports functionally to the Public Interest Oversight Board on matters related to the Board’s work program and refers to the Managing Director, Professional Standards, as a resource and key source of advice.

The IESBA is an independent standard-setting body that develops and issues the Code of Ethics for Professional Accountants (the Code). The Code includes standards on auditor independence and is applicable to the actions and decisions of all professional accountants, including those in business.

For further information about the position, please see the Call for Applications: Chair of the IESBA on the IFAC website. Applications are due by June 6, 2014.

About the IESBA
The International Ethics Standards Board for Accountants (IESBA) is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information.

About IFAC
The International Federation of Accountants (IFAC) 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. It is comprised of 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

There are positive signs the sovereign debt crisis is easing. The Greek and Portuguese governments have re-entered the bond markets and Portugal is poised to become the second Eurozone country, after Ireland, to exit its bailout arrangements.

Therefore, it is timely to reflect on what has been done since the bailout programs were introduced and since lenders to the Greek government wrote off significant losses on their debt holdings. Austerity measures have been implemented and government cash reserves built up, but much still needs to be done to raise the general standard of government reporting, transparency, and accountability.

We must not forget too quickly the lessons of poor government reporting—that in some cases was misleading.

At the heart of the issue remains a concern: private sector companies raising funds from investors on the capital markets are required to provide audited, accrual-based, financial statements, yet too many governments—even ones with bonds on the capital markets—don’t follow the same practices. In fact, many do not even use accrual accounting.

It has now been over a year since the G-20 Finance Ministers and Central Banks Governors' Meeting in Moscow declared a “goal of strengthening the public sector balance sheet” and of “looking at transparency and comparability of public sector reporting, and monitoring the impact of financial sector vulnerabilities on public debt.”

An integral part of promoting such transparency and comparability is accrual-based financial reporting in accordance with high-quality, globally-accepted standards, such as the International Public Sector Accounting Standards (IPSASs).

As one response to the G-20, the International Monetary Fund (IMF) and World Bank—along with the Organisation for Economic Co-operation and Development (OECD)—have progressed a review of the governance of the International Public Sector Accounting Standards Board (IPSASB). Additionally, the European Commission, through Eurostat, initiated work to consider how public sector financial reporting can be improved within the European Union. It noted that IPSASs “represent an indisputable reference for potential development of European standards.”

“IFAC is encouraged by several initiatives that are currently underway; in particular, strengthening the current governance arrangements of the IPSASB will further enhance the credibility of IPSASs and their influence on public sector financial reporting,” said Fayezul Choudhury, Chief Executive Officer of IFAC. “However, there is much more that needs to be done, and we believe that the G-20 has a key role to play in ensuring that momentum is maintained and governments recognize the benefits of enhancing financial management and reporting—to ultimately improve transparency and accountability.”

IFAC strongly recommends that, throughout 2014 and into the coming years, the G-20—in particular, finance ministers and central bank governors—continue to focus on this critical matter. To promote greater adoption of IPSASs, IFAC believes that these standards should be added to the Financial Stability Board’s list of standards that are designated as deserving of priority implementation.

Furthermore, as part of its key strategic focus IFAC will continue to promote the need for enhanced public sector reporting and financial management through its recently launched Accountability Now! initiative, which aims to promote awareness of the issue, facilitate guidance on implementation of IPSASs, and encourage the development of needed technical capacity.

IFAC submitted a comment letter in response to the International Public Sector Accounting Standards Board Review Group (the Review Group)’s proposed governance arrangements for the International Public Sector Accounting Standard Board (IPSASB), detailed in the Consultation Paper.

The International Federation of Accountants (IFAC) today announced the appointment of James Gunn as Managing Director, Professional Standards. Mr. Gunn’s appointment is effective at the end of June 2014, upon the retirement of Jim Sylph.

As Managing Director, Mr. Gunn will be a resource and key source of advice to the chairs of the independent standard-setting boards* and oversee the senior management of the boards. He will serve as a spokesperson for the boards and, with the boards’ chairs, establish and maintain relationships with key stakeholders. The position reports functionally to the chairs of the standards boards, and administratively to IFAC’s Chief Executive Officer (CEO). Mr. Gunn will also be the primary liaison between the independent standard-setting boards, the Monitoring Group, and the Public Interest Oversight Board (PIOB), as well as between the boards and IFAC.

“Having someone with James’ experience and knowledge in this role will continue to safeguard the independence of the standard-setting boards, while ensuring the continuation of a sound working relationship with the PIOB, IFAC, and other international groups,” said Fayez Choudhury, IFAC’s CEO. “In this position, James will contribute to the ongoing discussions with the Review Group developing proposals for the most appropriate oversight arrangements for the International Public Sector Accounting Standards Board.”

Currently, Mr. Gunn is the Technical Director of the International Auditing and Assurance Standards Board (IAASB), a board he has served for over a decade. In this position, Mr. Gunn has managed and overseen the activities of the board and its staff, and played a pivotal role in representing the board, building relationships, and conducting outreach with international stakeholders in more than 35 countries around the world. Mr. Gunn’s career began in the early 1990s with KPMG in its Canadian audit practice, and included a term in its national office.

“I am honored to have been selected for this position. I look forward to the challenges and opportunities of maintaining and building the confidence of the regulatory community, the profession, and other stakeholders in the public interest work of the independent standard-setting boards,” commented Mr. Gunn.

Mr. Gunn was selected after an extensive global call for applications. The process of identifying Mr. Gunn’s replacement as IAASB Technical Director is underway.

* The independent standard-setting boards consist of the International Auditing and Assurance Standards Board (IAASB), the International Accounting Education Standards Board (IAESB), the International Ethics Standards Board for Accountants (IESBA), and the International Public Sector Accounting Standards Board (IPSASB). IFAC serves the public interest by contributing to the development of strong and sustainable organizations, markets, and economies. As part of its public interest mandate, IFAC contributes to the development of high-quality international standards by facilitating and resourcing these standard-setting boards.

About IFAC
IFAC 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. It is comprised of 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

Nueva York, Nueva York, abril 10, 2014) – El Departamento de Desarrollo Internacional del Reino Unido (DFID por sus siglas en inglés) y la Federación Internacional de Contadores (IFAC), la organización global para la profesión contable, anunció un acuerdo de desarrollo de las organizaciones profesionales de contabilidad (OPC) en economías emergentes. Esta nueva iniciativa fue anunciada en un evento de mesas redondas en Londres, celebrado por Justine Greening, Secretaria de Estado para el Desarrollo Internacional (Reino Unido), en el cual participó Warren Allen -Presidente de la IFAC.

Según el acuerdo, el DFID proporcionará una financiación de £4.935 millones a la IFAC, a lo largo de siete años. Esta financiación será utilizada para fortalecer a las OPC en al menos 10 países DFID focales en cuatro regiones: Asia, Caribe, Medio Oriente y África del Norte, y África Subsahariana.  La IFAC facilitará, coordinará, y supervisará los programas de creación de capacidades y el soporte técnico, incluyendo soporte de igual a igual por parte de las OPC más establecidas, incluyendo las del Reino Unido. Estos programas construirán la capacidad gerencial, financiera y técnica de la OPC del país en desarrollo con el fin que puedan generar mejoras en los estándares profesionales y éticos.

"La IFAC tiene una larga historia en creación de capacidades y fortalecimiento de OPC, es parte de nuestra misión de interés público. Nos complace poder dar este próximo paso tan representativo en el camino," comentó Fayez Choudhury, director ejecutivo de la IFAC. "Las OPC de buen funcionamiento garantizan un insumo sostenible de contadores profesionales que apoyan las prácticas contables y la información financiera de alta calidad en los sectores tanto público como privado. Soportan una confianza potenciada en las empresas y transparencia en el uso de fondos públicos, dando lugar a una inversión extranjera y financiación de donante aumentada y una mayor responsabilidad y transparencia gubernamental—por ende, son esenciales para el crecimiento y la estabilidad económica.

La señora Greening explicó: "el sector financiero del Reino Unido es incomparable y su capacidad y experiencia puede estimular el desarrollo alrededor del mundo. Al ayudar a los países en desarrollo a administrar mejor sus propios recursos y atraer inversiones, podemos crear empleos y el crecimiento necesario para sacar a las personas de la pobreza."

La IFAC y el DFID son signatarios de MOSAIC: Memorando de Entendimiento para Fortalecer la Contabilidad y Mejorar la Colaboración, el cual establece la base para mejorar la cooperación y colaboración entre la IFAC, los donantes internacionales, y la comunidad de desarrollo internacional, para aumentar la capacidad de las OPC y mejorar la calidad de los sistemas de gestión financiera en las economías emergentes.

Acerca de la IFAC
IFAC es la organización global para la profesión contable, dedicada a servir el interés público a través del fortalecimiento de la profesión y contribuir en el desarrollo de economías internacionales sólidas. La IFAC se compone de 179 miembros y asociados en 130 países y territorios, representando aproximadamente a 2,5 millones de contadores en la práctica pública, la educación, el gobierno, la industria y el comercio.

Translated by the Instituto Nacional de Contadores Públicos (Colombia).

The SMP Committee submitted this comment letter on the International Auditing and Assurance Standards Board's Proposed Strategy for 2015-2019 and Proposed Work Program for 2015-2016.

The Accountant's Carlos Martin Tornero and Vincent Huck interview industry leaders about key issues facing the profession, encompassing transparency, public sector financial management reform, MINTs, 'hot' Southeast Asia, management accounting and the ongoing regulation debate. 

The World Survey starts this year in a Central London café, where we met Warren Allen, currently presiding over the International Federation of Accountants (IFAC). As IFAC president, Allen is globetrotting the world, London being a brief stop between meetings in New York and Australia.

"This is an exciting profession. We quote 2.5 million professional accountants under IFAC membership and there are not enough of us," Allen says, taking a sip of his cappuccino.

IFAC membership could expand this year with new countries, six candidates from around the world whose identity Allen would not reveal at this stage. The accountancy profession has attained global status, and what affects international mainstream economics affects accountants too.

Accountants, especially in the West, have felt the impact of the economic crisis in the past few years. At times it looked like they had lost public trust and that their relevance in the global economy was put into question. But as the tide of the economic recession recedes and economic recovery starts to be a reality again, accountants look at playing a major role in the economy and regaining public confidence.

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The UK Department for International Development (DFID) and the International Federation of Accountants (IFAC), the global organization for the accountancy profession, today announced an agreement to develop professional accountancy organizations (PAOs) in emerging economies. The new initiative was announced at a roundtable event in London, hosted by Justine Greening, UK Secretary of State for International Development, and attended by Warren Allen, IFAC President.

Under the agreement, DFID will provide £4.935m funding to IFAC over seven years. The funding will be used to strengthen PAOs in at least 10 DFID focal countries in four regions: Asia, the Caribbean, the Middle East and North Africa, and Sub-Saharan Africa. IFAC will facilitate, coordinate, and supervise capacity building programs and technical support, including peer-to-peer support by more established PAOs, including those in the UK. These programs will build the developing country PAOs’ managerial, financial, and technical capacity so that they can drive improvements in professional and ethical standards.

“IFAC has a long history of working to build capacity and strengthen PAOs as part of our public interest mission, and we are delighted about this significant next step in that journey,” said Fayez Choudhury, CEO of IFAC. “Well-functioning PAOs ensure a sustainable supply of professional accountants that support high-quality accounting practices and financial information in both the public and private sectors. They support enhanced confidence in business and transparency in use of public funds, giving rise to increased foreign investment and donor funding and improved government accountability and transparency—and therefore are essential to economic growth and stability.”

Ms. Greening said, “The UK’s financial sector is second to none and its skills and experience can boost development across the world. By helping developing countries to manage their own resources better and attract investment we can create the jobs and growth needed to lift people out of poverty.”

IFAC and DFID are signatories of MOSAIC: Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration, which sets out the basis for improving cooperation and collaboration between IFAC, international donors, and the international development community to increase the capacity of PAOs and improve the quality of financial management systems in emerging economies.

About IFAC
IFAC 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. It is comprised of 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.