Page 1 | Confidential and Proprietary Information Russell Guthrie Chief Financial Officer Executive...

| Confidential and Proprietary Information

Russell GuthrieChief Financial OfficerExecutive Director, Professional Relations

Compliance Program Update


2001-2003 2004 2005-2007 2007-2014 2015 & Beyond

Evolution of the IFAC Member Compliance ProgramAt a glance


• Enron• Arthur Andersen• Sarbanes-Oxley• IFAC Reforms

2001-2003

Evolution of the IFAC Member Compliance Program


• IFAC Member Compliance Program (CP)

• Statements of Membership Obligations (SMO) and IFAC admission criteria as global benchmark

2004



Level of development and capacity

Holistic approach considerations


Language and culture

Level of responsibility

of PAOs

Regulatory framework

and legislative tradition

Holistic approach considerations

Other environmental factors


• Self-assessments• Transparency – publication

on IFAC website • Public Interest Oversight

Board commences observation of Compliance Program as a public interest activity

2005-2007



• SMO Action Plans for continuous improvement

• Monitoring of progress • Revised SMOs• G-20 adoption status

reports

2007-2014



• 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


• 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


• 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


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



• M&E methodology• Dashboard Reports on

adoption status & SMO fulfillment

• Guidance enabling enhanced self-assessment

• Compliance Program 2.0

2015 & Beyond


www.wcoa2014rome.com

Will you join the global accountancy community in Rome in November 2014?

www.ifac.org

http://www.wcoa2014rome.com/

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