International Federation of Accountants Importance of ...
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International Federation of AccountantsInternational Federation of Accountants
Importance of Reliable Financial Reporting Importance of Reliable Financial Reporting in the International Contextin the International Context
October 2005October 2005
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• Over 2.5 million professional accountants Over 2.5 million professional accountants worldwide represented by over 160 IFAC worldwide represented by over 160 IFAC member bodies in 119 countriesmember bodies in 119 countries
• Contributes to every sector and aspect of the Contributes to every sector and aspect of the global economyglobal economy
The International Accountancy ProfessionThe International Accountancy Profession
The ProfessionThe Profession
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Achieved through: Achieved through:
• Market-driven policiesMarket-driven policies
• TransparencyTransparency
• Sound corporate governanceSound corporate governance
• Credible financial reportingCredible financial reporting
Economic Stability and Growth Economic Stability and Growth
The Global EnvironmentThe Global EnvironmentThe Global EnvironmentThe Global Environment
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Building a Global Financial Building a Global Financial Infrastructure Infrastructure
• Transparent financial reporting processTransparent financial reporting process
• Adherence to internationally recognized Adherence to internationally recognized
standardsstandards
• Well-designed regulatory structureWell-designed regulatory structure
• Consistent application of regulations Consistent application of regulations
• Robust corporate governance Robust corporate governance
The Global EnvironmentThe Global EnvironmentThe Global EnvironmentThe Global Environment
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Financial Reporting ProcessFinancial Reporting Process
• Contributes to financial decision makingContributes to financial decision making
• Characterized by integrity by all those in the Characterized by integrity by all those in the
financial reporting supply chain financial reporting supply chain
• Focuses on public interestFocuses on public interest
• Investors have roleInvestors have role
The Global EnvironmentThe Global EnvironmentThe Global EnvironmentThe Global Environment
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IFAC Standard SettingIFAC Standard Setting
• International Auditing and Assurance International Auditing and Assurance Standards Board (IAASB)Standards Board (IAASB)
• Ethics CommitteeEthics Committee• International Public Sector Accounting International Public Sector Accounting
Standards BoardStandards Board• Education Committee Education Committee • Member Body Compliance ProgramMember Body Compliance Program
IFAC Standard SettingIFAC Standard Setting
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IAASBIAASB• Develops high-quality auditing, assurance and Develops high-quality auditing, assurance and
related services standards related services standards
• Members include practicing accountants, Members include practicing accountants, academics, and representatives of business and academics, and representatives of business and government government
• Has a thorough and transparent due processHas a thorough and transparent due process
• Obtains public input through CAG, as do other Obtains public input through CAG, as do other IFAC standard-setting committeesIFAC standard-setting committees
Standard Setting - IAASBStandard Setting - IAASB
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Ethics CommitteeEthics Committee• Develops Code of Ethics applicable to accountants Develops Code of Ethics applicable to accountants
in public practice, business and government in public practice, business and government
• Code requires all accountants to act with integrityCode requires all accountants to act with integrity
• Code features principles-based approachCode features principles-based approach
• No member body or firm is allowed to apply less No member body or firm is allowed to apply less
stringent standardsstringent standards
• Current focus on updating guidance on Current focus on updating guidance on
independence independence
Standard Setting - EthicsStandard Setting - Ethics
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International Public Sector Accounting International Public Sector Accounting Standards Board (IPSASB)Standards Board (IPSASB)
• Strives to improve public sector financial Strives to improve public sector financial
management and accountability management and accountability
• Issues authoritative international public Issues authoritative international public
sector financial reporting standardssector financial reporting standards
• These standards help to build credibility in These standards help to build credibility in
financial reporting by governments financial reporting by governments
Standard Setting – Public SectorStandard Setting – Public Sector
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Education CommitteeEducation Committee• Develops standards and guidance for Develops standards and guidance for
education and development of professional education and development of professional accountantsaccountants worldwide worldwide
• Strives to achieve global quality and Strives to achieve global quality and
consistency in accounting educationconsistency in accounting education
• Underpins all standard-settingUnderpins all standard-setting
Standard Setting - EducationStandard Setting - Education
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Member Body Compliance ProgramMember Body Compliance Program• Statements of Membership Obligations Statements of Membership Obligations
serve as the foundationserve as the foundation• Requires incorporation of IFAC and IASB Requires incorporation of IFAC and IASB
standards by member bodies standards by member bodies • Requires that member bodies have quality Requires that member bodies have quality
assurance and disciplinary programsassurance and disciplinary programs• Provides global snapshot of the profession Provides global snapshot of the profession
with information posted on IFAC website.with information posted on IFAC website.
IFAC Compliance ProgramIFAC Compliance Program
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Value of International StandardsValue of International Standards
Contributes to --Contributes to --
• Efficient functioning of capital marketsEfficient functioning of capital markets
• Greater comparability of informationGreater comparability of information
• Investor confidenceInvestor confidence
ConclusionConclusionConclusionConclusion
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International Federation of AccountantsInternational Federation of Accountants
www.ifac.orgwww.ifac.org