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INTERNATIONAL FEDERATION OF ACCOUNTANTS

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Malaysia. Pakistan. 1 Strategy. 1 IFAC SMP Committee. The constituents of the SMP Committee are: ... Phase 2 focus group interviews in 5 countries (Information ... – PowerPoint PPT presentation

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Title: INTERNATIONAL FEDERATION OF ACCOUNTANTS


1
International Federation of Accountants
IFAC SMP Committees Strategy and Work
Plan Bernard Scicluna, IFAC SMP Committee
Member Paul Thompson, Senior Technical Manager,
IFAC SMP Committee IFAC Small and Medium
Practices Forum Malta, October 30, 2007
2
Content
  • Overview of IFAC SMP Committee Strategy
  • Overview of Strategy
  • Detailed Work Plan
  • 2. Input to Standard Setting
  • Practical Support
  • Open Discussion

3
1 Strategy 1 IFAC SMP Committee
  • SMP Working Party (2000 2001)
  • To identify the types of support some national
    accounting bodies provide their member SMPs, with
    the goal of learning how IFAC, in turn, might
    support SMPs at the international level
  • SMP Task Force (2002 2003)
  • SMP Permanent Task Force (2004 2005)
  • Former Chair, Angelo Caso
  • Formal IFAC Committee in Jan 2006

4
1 Strategy 1 IFAC SMP Committee
  • SMP Working Party (2000 2001)
  • To identify the types of support some national
    accounting bodies provide their member SMPs, with
    the goal of learning how IFAC, in turn, might
    support SMPs at the international level
  • SMP Task Force (2002 2003)
  • SMP Permanent Task Force (2004 2005)
  • Former Chair, Angelo Caso
  • Formal IFAC Committee in Jan 2006

5
1 Strategy 1 IFAC SMP Committee
  • SMP Working Party (2000 2001)
  • To identify the types of support some national
    accounting bodies provide their member SMPs, with
    the goal of learning how IFAC, in turn, might
    support SMPs at the international level
  • SMP Task Force (2002 2003)
  • SMP Permanent Task Force (2004 2005)
  • Former Chair, Angelo Caso
  • Formal IFAC Committee in Jan 2006

Members of the Working Party Angelo Caso,
Chairman, Italy Alex Hilman, Israel N.D. Gupta,
India Barbara Vigilante, USA Stephen Spector,
Canada Peter Langard, UK
6
1 Strategy 1 IFAC SMP Committee
  • Finland
  • Germany
  • Italy
  • Malta
  • UK (2)
  • Canada
  • USA
  • China
  • Hong Kong SAR
  • Israel
  • Turkey
  • India
  • Malaysia
  • Pakistan
  • Nigeria
  • Tunisia
  • Brazil

Chair Sylvie Voghel (Canada) 18 members from 17
different parts of the world Resources one
full-time senior technical manager Budget of US
350k (2007)
7
1 Strategy 1 IFAC SMP Committee
  • The constituents of the SMP Committee are
  • SMPs who provide accounting and assurance
    services principally but not exclusively to SME
    clients
  • In so far as they provide services to SMEs,
    other professional accountants are included as
    constituents.
  • The Committee is charged with
  • Identifying and representing the needs of its
    constituents
  • Where applicable, to give consideration to
    relevant issues pertaining to SMEs.

8
1 Strategy 1 IFAC SMP Committee
  • Condensed Terms of Reference
  • Ensure that international standard-setting bodies
    give due consideration to SMP/ SME issues.
  • Advocate issues, from an SMP and SME perspective,
    to appropriate parties.
  • Facilitate the communication and sharing of
    information.
  • Seek to co-ordinate development of guidance on
    issues relevant to those providing accounting and
    assurance services to SMEs.

9
1 Strategy 2 SMP/SME Issues
  • Committee sees main issues faced by SME/SMP
  • Relevance of international standards to SME/SMP
  • more suited to public interest entities and
    larger practices
  • complexity makes difficult and costly to apply
  • Capacity of SMP/SME to efficiently implement and
    comply with these standards
  • lack of in-house technical resources
  • many member bodies unable to provide support
  • Ability to remain competitive, client focused and
    operationally proficient

10
1 Strategy 2 SMP/SME Issues
  • Committee sees main issues faced by SME/SMP
  • Relevance of international standards to SME/SMP
  • more suited to public interest entities and
    larger practices
  • complexity makes difficult and costly to apply
  • Capacity of SMP/SME to efficiently implement and
    comply with these standards
  • lack of in-house technical resources
  • many member bodies unable to provide support
  • Ability to remain competitive, client focused and
    operationally proficient

11
1 Strategy 2 SMP/SME Issues
  • Committee sees main issues faced by SME/SMP
  • Relevance of international standards to SME/SMP
  • more suited to public interest entities and
    larger practices
  • complexity makes difficult and costly to apply
  • Capacity of SMP/SME to efficiently implement and
    comply with these standards
  • lack of in-house technical resources
  • many member bodies unable to provide support
  • Ability to remain competitive, client focused and
    operationally proficient

12
1 Strategy 3 Strategy
  • Two complimentary strategic objectives
  • Increase relevance
  • help shape form and content of standards
  • ensure appropriate balance of cost and benefit to
    SME/SMP
  • via input to standard setting processes
  • Increase capacity ability

13
1 Strategy 3 Strategy
  • Two complimentary strategic objectives
  • Increase relevance
  • Increase capacity ability
  • help SMPs perform high quality work and
    efficiently implement standards
  • while being competitive, client focused and
    profitable
  • via practical support such as implementation
    guides and web-based information resources

14
1 Strategy 3 Strategy
  • Strategic and Operational Plan 2007-2010 (summary
    article posted as pre-reading)
  • In reflection of SMP Committees 2 pronged
    strategy
  • SMP Committee work program
  • 40 on input to standard setting
  • 40 on practical support and
  • 20 on collaboration and outreach
  • Annual IFAC SMP Forum regional workshops
    conference presentations

15
1 Strategy 4 Consultation
  • SMP/SME high on IFAC agenda
  • In accordance with the SMP Committee due process
    and working procedures the Strategic
    Operational Plan is reviewed and updated each
    year
  • The annual SMP Forum and other outreach
    collaboration activities provide input and assist
    in the achievement of objectives by providing
    advice on priorities and projects

16
2 Standard Setting 1 Input to Standard Setting
IAASB
  • Most important element of work program
  • SMP Committee inputs
  • Technical comment letters on draft ISAs
    representation on/at ISA project task
    forces/IAASB and
  • High level representation at IAASB CAG input
    to strategy development

17
2 Standard Setting 1 Input to Standard Setting
IAASB
  • SMP Committee internal position paper
  • call for cost-benefit analysis
  • an audit is an audit
  • one set of think small first standards and
  • particular concerns over relevance of
    requirements, documentation and quality control

18
2 Standard Setting 1 Input to Standard Setting
IAASB
  • SMP Committee has input to IAASB Strategy Review
  • Committee would like to see
  • moratorium on standards development
  • increased focus on implementation and
  • investigation into alternative assurance services

19
2 Standard Setting 1 Input to Standard Setting
IAASB
  • Input is proving increasingly effective
  • Clarity project should help SMP/SME
  • but risk of large increase in requirements

20
2 Standard Setting 2 Input to Standard Setting
IESBA
  • SMP Committee response to ED of proposed
    revisions to Independence section of IFAC Code of
    Ethics (Section 290)
  • SMP and clients disproportionately impacted
  • concerns over, amongst other things
  • mandatory partner rotation for ESPI
  • definition of ESPI and
  • tighter restrictions on non-assurance services

21
2 Standard Setting 2 Input to Standard Setting
IESBA
  • SMP Committee has input to IESBA Strategy Review
  • Committee would like to see
  • moratorium on changes to the Code of Ethics
  • increased focus on implementation and
  • cost-benefit analysis of all proposed future
    changes to the Code

22
2 Standard Setting 3 Input to Standard Setting
IASB
  • IFAC has closely tracked and input since start
  • Globally applicable standard, consistently
    implemented
  • Ease compliance burden on preparers
  • Ensure benefits exceed costs
  • Release of ED is milestone
  • IFAC supports project committed to assisting
    IASB secure optimal outcome

23
2 Standard Setting 3 Input to Standard Setting
IASB
  • Encouraging member bodies, regional accountancy
    organizations to contribute to debate
  • Promoting conduct of field tests more member
    bodies need to join
  • Getting SMEs and SMPs engaged
  • Responding to ED SMP Committee led drafting
  • Pragmatic approach focus on major things

24
2 Standard Setting 3 Input to Standard Setting
IASB
  • Micro-Entity Financial Reporting Research
    Project
  • Phase 1 review of existing evidence (Information
    Paper Dec. 2006)
  • More research required.
  • Phase 2 focus group interviews in 5 countries
    (Information Paper Dec. 2007?)
  • ED is not suitable for micro-entities
  • no clear case for separate tier of micro-entity
    guidance

25
2 Standard Setting 4 Input to Standard Setting
Other
  • IAESB
  • International Education Standards and
  • International Education Practice Statements
  • PAIB Committee
  • International Good Practice Principles and
    Guidance
  • IPSASB
  • International Public Sector Accounting Standards

26
2 Standard Setting 5 Conclusion
  • Input to standard setting was SMP Committees
    original raison detre
  • Considerable task with no guarantee of success
  • Collaborative effort required
  • See Session 3

27
3 Practical Support 1 Implementation Guides
  • Implementation guides
  • ISA Guide
  • QC Guide
  • Practice Management Guide
  • Other
  • Vision suite of guides
  • Guide to Ethics Code for SMPs (IESBA)

28
3 Practical Support 2 Web-based Resources
  • International Center for SMPs
  • http//www.ifac.org/SMP/
  • IFACnet
  • Customized web search engine providing access to
    resources of IFAC and its member bodies
  • http//www.ifacnet.com

29
3 Practical Support 3 Conclusion
  • SMP/SME, especially in emerging and developing
    nations, in urgent need of support
  • Collaborative effort required
  • See Session 4

30
Open Discussion
  • Do you agree with the main issues facing SMP/SME
    as suggested by the IFAC SMP Committee?
  • Do you agree with the broad thrust of the IFAC
    SMP Committees Strategic Operational Plan
    2007-2010 ?
  • Do you have any other questions?

31
www.ifac.org
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