The International Auditing and Assurance Standards Board (IAASB) today released International Auditing Practice Note (IAPN) 1000, Special Considerations in Auditing Financial Instruments, to provide important practical assistance to auditors when addressing valuation and other considerations pertaining to financial instruments. Financial instruments is an area of financial reporting involving complex issues and which has come under particular focus due to the recent difficult financial market conditions.

“The IAASB remains focused on supporting financial stability and high-quality financial reporting by continuing to help enhance the consistency of audits.  Accordingly, IAPN 1000 provides important material that will assist auditors in understanding the nature of, and risks associated with, financial instruments, and the different valuation techniques and types of controls that may be used by entities in relation to them. It then highlights important audit considerations that may be relevant throughout the audit process,” noted Prof. Arnold Schilder, IAASB Chairman. “The IAPN is relevant to audits of entities of all sizes, as all entities may be subject to risks of material misstatement when using financial instruments.”

IAPNs are non-authoritative documents that do not impose additional requirements on auditors beyond those included in the International Standards on Auditing (ISAs), nor do they change the auditor’s responsibility to comply with all ISAs relevant to the audit. In finalizing IAPN 1000, and in response to stakeholder concerns, the IAASB evaluated the clarity and appropriateness of the authority of the existing International Auditing Practice Statements (IAPSs). The IAASB decided to withdraw the existing category of pronouncements known as IAPSs and to establish IAPNs, as reflected in the amended Preface to the International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements. Accordingly, the six existing IAPSs were also withdrawn as the IAASB determined that they were largely outdated and inconsistent with the text of the clarified ISAs. “The IAASB will be considering in its forward plans matters covered in some of the extant IAPSs, for example the relationship between auditors and banking supervisors, as it develops standards, new IAPNs, or other forms of guidance in the future,” commented Prof. Schilder.

“The IAASB understands that the quality and consistency of audit practice is helped not only through new standards but by other tools that can be used in developing training programs, internal guidance or corresponding national material. New IAPN 1000 helps serve this aim,” explained James Gunn, IAASB Technical Director. “In developing this practical guidance, the IAASB itself gained a deeper understanding of the challenges in this complex area, which will be used to further inform its future work.”

About the IAASB
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. The structures and processes that support the operations of the IAASB are facilitated by IFAC.

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. IFAC is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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The Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) today released the second edition of its Guide to Practice Management for Small- and Medium-Sized Practices (PM Guide). First released in 2010 and developed with CPA Australia, the new edition of the guide features guidance on several new topics, including cloud computing and updated resources for further reading.

“As trusted advisors and small businesses themselves, small practitioners need to be well-versed in all areas of operating a practice. The PM Guide can help SMPs achieve proficiency in a variety of areas to ensure their sustainable, long-term success,” said SMP Committee Chair Sylvie Voghel. “Only by properly managing their practices can SMPs successfully compete in today’s market for professional services.”

To help practitioners improve the management of their accounting practices, this guide includes an extended case study, a sample office procedures manual, and numerous checklists and other worksheets. The comprehensive guide is comprised of eight standalone modules that include developing a growth strategy, managing staff and client relationships, risk management, succession planning, and more. It is intended to help IFAC members support their SMP constituents, and can be used for education and training. An updated companion guide to help members make the best use of the PM guide will be released in early 2012.     

IFAC is grateful to its member bodies Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili and Certified General Accountants Association of Canada for providing some of the funding for the PM Guide’s development.

The updated PM Guide can be downloaded free of charge from the SMP Publications and Resources area of the IFAC website. Filter by language to find translations of the first edition. Visit the Small and Medium Practices web pages for access to additional resources, aligned with the topics in each module of the PM guide (see Relevant Links—Practice Management).

About the SMP Committee
The SMP Committee of the International Federation of Accountants represents the interests of professional accountants operating in small- and medium-sized practices and other professional accountants who provide services to small- and medium-sized entities (SMEs). The committee develops guidance and tools, and works to ensure the needs of the SMP and SME sectors are considered by standard setters, regulators, and policy makers. The committee also speaks out on behalf of SMPs to raise awareness of their role and value, especially in supporting SMEs, and the importance of the small business sector overall.

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 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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It is my pleasure to be here today at this important initiative of ESMA. It brings together international and European leaders responsible for standard setting, supervision and enforcement for today’s capital markets.

The International Auditing and Assurance Standards Board (IAASB) is a global independent standard-setting body. It serves the public interest by setting high-quality standards for auditing, review, other assurance, quality control, and related services. Through its standards, the IAASB seeks to enhance the quality and consistency of practice throughout the world and strengthen public confidence in the auditing and assurance profession at the global and local levels.

I was appointed IAASB Chairman in 2009, when work to establish the clarified International Standards on Auditing (clarified ISAs) was just completed. Many had thought the IAASB program would be much more subdued than it had been. Of course, that has not been the case.

The PAIB Committee submitted its Comment Letter for the International Integrated Reporting Council (IIRC)’s Discussion Paper, Towards Integrated Reporting: Communicating Value in the 21^st Century. The PAIB Comment Letter provides the perspective of a preparer of internal and external business reporting. Among other recommendations, it highlights the need for how-to guidance for preparers to help them develop or redesign their internal processes to ensure readiness, and suggests that materiality needs to be defined in relation to investors and wider stakeholders.

This an update on the initiative the IAESB has undertaken to revise and redraft its suite of eight International Education Standards (IESs).

The Board of the International Federation of Accountants recently approved proposed revisions to the Statements of Membership Obligations (SMOs) to be released for public comment. The SMOs form the basis of the IFAC Member Body Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

The SMOs are issued under the IFAC Board’s authority, and the Compliance Advisory Panel (CAP), together with IFAC Compliance staff, is responsible for reviewing their continuing relevance and sufficiency.

“Since the SMOs were established seven years ago, the regulatory and standard-setting environments in which IFAC members and associates operate have further evolved. As a result, revisiting the SMOs was necessary to reflect those developments and their impact on the global profession,” explained Manuel Sanchez y Madrid, chairman of the CAP. “We redrafted the SMOs to clarify what is expected of IFAC members when they have varying degrees of responsibility for an SMO area. We also brought the SMOs in line with IFAC’s current strategic focus on adoption and implementation of international standards. In the revision project, we were guided by years of experience with the Compliance Program. We looked at how the SMOs have been interpreted and how the compliance assessment is performed by IFAC staff. As a result, I believe the proposed revised SMOs are easier to understand and apply.”

The SMOs and the Compliance Program are designed to assist IFAC in its mission of strengthening the global accountancy profession. The revised SMOs better articulate the obligations of IFAC membership, and the Compliance Program encourages IFAC members and associates in their ongoing efforts to achieve a higher quality of service.

How to Comment
The IFAC Board and the CAP invite all stakeholders to comment on the proposed revisions. To access the Exposure Draft and submit a comment, visit the IFAC website. Comments on the Exposure Draft are requested by March 5, 2012.

About the IFAC Member Body Compliance Program
IFAC members and associates are required to participate in the IFAC Member Body Compliance Program to demonstrate that they are maintaining their good standing and addressing the requirements of IFAC membership. The Program is the responsibility of the IFAC Compliance Staff, reporting to the Chief Executive. The program is overseen by the Compliance Advisory Panel, which—as one of IFAC's public interest activities—is overseen by the Public Interest Oversight Board (PIOB).

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. IFAC is comprised of 167 members and associates in 127 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

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