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Transcript of Page 1 | Confidential and Proprietary Information Russell Guthrie Chief Financial Officer Executive...
Page 1 | Confidential and Proprietary Information
Russell GuthrieChief Financial OfficerExecutive Director, Professional Relations
Compliance Program Update
Page 2 | Confidential and Proprietary Information
2001-2003 2004 2005-2007 2007-2014 2015 & Beyond
Evolution of the IFAC Member Compliance ProgramAt a glance
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• Enron• Arthur Andersen• Sarbanes-Oxley• IFAC Reforms
2001-2003
Evolution of the IFAC Member Compliance Program
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• IFAC Member Compliance Program (CP)
• Statements of Membership Obligations (SMO) and IFAC admission criteria as global benchmark
2004
Evolution of the IFAC Member Compliance Program
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Level of development and capacity
Holistic approach considerations
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Language and culture
Level of responsibility
of PAOs
Regulatory framework
and legislative tradition
Holistic approach considerations
Other environmental factors
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• Self-assessments• Transparency – publication
on IFAC website • Public Interest Oversight
Board commences observation of Compliance Program as a public interest activity
2005-2007
Evolution of the IFAC Member Compliance Program
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• SMO Action Plans for continuous improvement
• Monitoring of progress • Revised SMOs• G-20 adoption status
reports
2007-2014
Evolution of the IFAC Member Compliance Program
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• Tension between “adoption” (ISAs, IFRSs, IPSASs, IESs) and “adoption of no less stringent requirements” (IESBA Code)– IESBA’s different wording for the SMO authoritative statement seems
less conducive for PAOs to adopt the “book” of the Code
– The Code addressed to IFAC Member Bodies sometimes seen by other stakeholders as not their matter of interest
– Lack of clear understanding of what it means to adopt the Code (IAASB has its Modifications Policy…)
Observations on the IESBA Code adoption
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• More complex assessment of the adoption of the Code:– Aspects embedded in laws, PAO bylaws, sector specific regulatory
requirements (banking, stock exchange, insurance, etc.)
– Adoption not only national but also via Forum of Firms
– ISAs or IFRSs tend to be adopted “en block”
– Translation, culture and awareness building (both members and external stakeholders) also an issue
Observations on the IESBA Code adoption
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• Assessing quality of implementation is even more complex– What process really exist and operate in practice (as opposed to
on paper)
– Challenges in implementing ongoing supporting activities (I&D, CPD, etc.)
– Proxy observations are used (effectiveness of I&D process, cases heard, online ethics resources for members, etc.)
Observations on the IESBA Code implementation
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Reporting on the status of adoption & SMO fulfillment
Adopted
Partially Adopted
Not Adopted
PAO Continuous
Quality Managemen
t Cycle
Not Active
Consider
Plan
Execute
Review & Improve
Sustain
Status of Adoption Status of SMO Fulfillment
Evolution of the IFAC Member Compliance Program
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• M&E methodology• Dashboard Reports on
adoption status & SMO fulfillment
• Guidance enabling enhanced self-assessment
• Compliance Program 2.0
2015 & Beyond
Evolution of the IFAC Member Compliance Program
www.wcoa2014rome.com
Will you join the global accountancy community in Rome in November 2014?
www.ifac.org