1. Education Committee Extends Comment Period for Auditor Competence ED

IFAC's Education Committee has extended the comment period on its exposure draft (ED), Competence Requirements for Audit Professionals, until August 15, 2005. The proposed International Education Standard is designed to ensure that audit professionals have the necessary knowledge, skills, values, ethics, and attitudes to perform competently and carry out their public interest responsibilities. The proposed standard will apply to all professional accountants, not just the audit engagement partner, who have a substantial involvement in the audit assignment and who are responsible for making significant judgment decisions contributing to the overall audit opinion.

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2. IFAC Strengthens Code of Ethics for Professional Accountants

The IFAC Ethics Committee has issued a newly revised Code of Ethics for Professional Accountants, which establishes a conceptual framework for all professional accountants to ensure compliance with the five fundamental principles of professional ethics - integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. Under the framework, all professional accountants are required to identify threats to these fundamental principles and, if there are threats, to apply safeguards to ensure that the principles are not compromised. The framework applies to all professional accountants, whether in public practice, business, industry or government. The Code is effective from June 30, 2006, and early adoption is encouraged.

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3. Ethics Committee Invites Comments on ED on Network Firms

The Ethics Committee has issued an exposure draft (ED) proposing revisions to the definition of a network firm in the IFAC Code of Ethics for Professional Accountants. Network firms are required to be independent of an audit client of a firm within the network. The ED, Proposed Revised Section 290, Independence - Assurance Engagements, proposes changes that would classify a firm as a network firm of another firm if the two share a common brand name or if they share significant professional resources or revenues, profits, costs or expenses. Comments on the ED are requested by September 30, 2005. To download the ED, please visit http://www.ifac.org/EDs.

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4. IAASB Issues New Standard on Review of Interim Financial Information

To further enhance consistency in auditor performance and reporting, the International Auditing and Assurance Standards Board (IAASB) has issued a new standard: International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. The new ISRE contains standards and guidance on the inquiries and analytical and other review procedures that the auditor performs to conclude on such interim financial information. The standard is effective beginning December 15, 2006.

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5. IAASB Invites Comments on Proposed Standards on Auditor Reporting

The IAASB is seeking comments on exposure drafts of two proposed International Standards on Auditing (ISAs) designed to further enhance the quality of auditor reporting. Proposed ISA 701, The Independent Auditor's Report on Other Historical Financial Information, addresses auditors' reports for a wide variety of engagements, including reporting on a single financial statement or a specific element of a financial statement. Proposed ISA 800, The Independent Auditor's Report on Summary Audited Financial Statements, provides new standards and guidance on the criteria to be used and the procedures to be performed in an engagement to report on summary financial statements.

Comments on the exposure drafts, which can be downloaded at http://www.ifac.org/EDs, are requested by October 31, 2005.

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6. 2004 IFAC Annual Report Available Online

IFAC has issued its 2004 Annual Report. The report highlights IFAC activities to develop the global profession. These include initiatives to strengthen standard setting, to identify and address the needs of small and medium practices and professional accountants in business, to reach out to developing nations, and to encourage quality performance by all accountants.

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7. IFAC Expands Support for Developing Nations

IFAC's Developing Nations Permanent Task Force is continuing its work to build the capacity of the accountancy profession throughout the world. To assist in the establishment and development of professional accountancy bodies, the task force is developing a tool kit that will provide guidance on the essential elements necessary for a successful accountancy organization, including guidance on relations with government, membership requirements, education and training, and regulation and standard setting. The task force is also providing comments on a number of key projects by IFAC's standard-setting boards and committees and other international standard setters to ensure they give due consideration to issues relevant to developing nations.

For more information on these and other initiatives, please visit the Developing Nations Permanent Task Force's home page.

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8. IFAC Comments on IASB Project on Accounting Standards for SMEs

IFAC has responded to the International Accounting Standards Board's (IASB) staff questionnaire on possible modifications of the recognition and measurement principles in International Financial Reporting Standards (IFRSs) for use in IASB standards for small and medium-sized entities (SMEs). The questionnaire was published for public comment in early April 2005.

IFAC's preferred outcome for the SME project, as explained in the response, is a "substantial simplification of IFRSs for SMEs, both in terms of disclosure and presentation as well as recognition and measurement." The response sets out a package of simplifications that IFAC believes will "both serve the public interest as well as respond to the circumstances of SMEs and those external users interested in their general purpose financial statements."

IFAC's response may be downloaded from the IFAC website. The IASB questionnaire and other responses to it are available on the IASB's website at http://www.iasb.org.

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9. Information on National Regulatory Frameworks Available as Part of IFAC Compliance Program

As a result of Part 1 of the IFAC Member Body Compliance Program, Assessment of the Regulatory and Standard-Setting Framework, IFAC's compliance team has collected information from more than 145 member bodies on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

Over 50 responses to Part 1 have now been posted to IFAC's website and additional responses will be posted in the next month. The responses provide insight into the differences in the regulatory and standard-setting frameworks in place in member body countries. Click here to view the responses.

Part 2 of the Compliance Program, the member body self-assessment of compliance with IFAC's Statements of Membership Obligations, will be launched later this year. .

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10. Keynote Speeches on International Accountancy Issues Available on IFAC's Website

Visitors to IFAC's website (http://www.ifac.org) may view more than a dozen speeches presented over the last few months by IFAC President Graham Ward, IFAC Chief Executive Ian Ball and other IFAC leaders to IFAC member bodies, regional accountancy organizations, governmental bodies, and investor groups on a range of topics including the profession's role in serving the public interest, building an investment climate of trust, and promoting strong corporate governance. The speeches are available in the Media Center (http://www.ifac.org/MediaCenter) as well in the Articles and Speech Library (http://www.ifac.org/Library).

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