Developing a Nascent Audit Profession

1. Developing a Nascent Audit Profession World Bank Advanced Program in Accounting and Auditing Regulation June 28, 2005

2. Overview • About IFAC • IFAC Membership and Compliance • Member Body Obligations • Compliance Program • IFAC Developing Nations Permanent Task Force • Role, Objectives and Priorities • Establishment and Development of the Profession • Challenges • Opportunities for Co-operation and Collaboration

3. IFAC Today Global organization for accountancy profession Expanding network of 163 member bodies in 119 countries, representing 2.5 million accountants Supported by regional accounting networks

4. IFAC’s Mission To serve the public interest,strengthen the worldwide accountancy profession and contribute to the development of strong international economies

5. Membership and Compliance • Statements of Membership Obligations • Approved by IFAC Board March 2004 • Basis for evaluating status of members in good standing • Basis for evaluating new applicants • Incorporate International Standards • Assist in implementing the International Standards

6. Seven SMOs • Quality assurance • Investigation and discipline • International Education Standards • Pronouncements and papers issued by the IAASB • IFAC Code of Ethics • IPSASs and other PSC guidance • International Financial Reporting Standards

7. Statements of Membership Obligations • Obligations whether the SMO function is the responsibility of: • The member body; or • Another body (government, regulators, other professional organization etc)

8. Compliance with SMOs • A member has used best endeavors if • It could not reasonably do more than it has done and is doing to meet the particular obligation

9. Member Body Compliance Program • Three key aspects • Regulatory and standard-setting framework fact-gathering • Convergence activities and gap analysis • Action plans and development

10. Compliance Activities • Part 2 SMO Self-Assessment • Convergence approach • Standards incorporated • Monitoring and quality assurance programs • Implementation activities • Part 2 Basis for gap analysis • Reasons for not incorporating standards • Regulatory and resource challenges

11. Compliance Activities • Part 3 Action plans • Identify solutions • Member body responsibilities • Program enforcement action • Failure to demonstrate evidence of best endeavors • Lack of participation

12. Communicating Results • Share and exchange information • World Bank, development banks, donors • Results to be posted on IFAC website • Demonstrate members’ progress • Activities to improve audit quality • Basis for facilitating discussions with regulators and governments • Dialogue with other national bodies

13. Developing Nations Task Force • Vision • Every country to have a recognised member body of IFAC. • Mission • To support the development of the worldwide accountancy profession working in partnership with the global profession and other relevant organisations

14. Priorities • Tools to assist professional bodies • Share and transfer information • Access to resources • Ways to address challenges to implementation of standards • Experience in facilitating regulatory reform • Input to standard-setting process • Grow IFAC membership

15. Role of Accountancy Bodies • Sustainable development of profession requires a professional body • Objective must be to develop and enhance the profession • Partnership • Government • Accountants and Auditors • Public

16. Development Challenges • Capacity • Environment • Resources

17. Opportunities for Co-operation and Collaboration • IFAC membership • Regional co-operation • Collaboration between the international profession, development partners, and governments

18. Conclusion • High quality standards and practices • Issues and challenges in developing and transition economies • IFAC activities as a platform for change and communication

19. www.ifac.org