The Public Interest Oversight Board is the international body that seeks to improve the quality and public interest focus of the international standards formulated by standard-setting boards operating under the auspices of the International Federation of Accountants in the areas of audit and assurance, education, and ethics. Through its oversight activities, the PIOB works to bring greater transparency and integrity to the audit profession, thereby contributing to the enhanced quality of international financial reporting.
The PIOB was created in 2005 after a series of high-profile corporate scandals undermined the public´s confidence in the credibility of independent audit opinions. The fallout from the crisis underscored the need for high quality and broadly applicable international accounting and audit standards that would work towards strengthening and bringing consistency to financial reporting around the world.
By providing independent oversight, the PIOB works to eliminate the conflict of interest caused by the audit profession setting its own standards, while ensuring that accountability, transparency, and responsiveness to stakeholder needs are present throughout the entire process of standard setting.
Independent oversight is necessary for financial markets: investors want to know that the financial information on which they base their capital allocation decisions is credible and reliable. By overseeing the development of high-quality professional standards, the PIOB seeks to further their international adoption and implementation, helping to improve the comparability of financial statements across the globe.
The PIOB oversees the public interest activities of three of the IFAC’s independent standard-setting boards--known collectively as Public Interest Activity Committees or PIACs--and their respective Consultative Advisory Groups or CAGs. These boards include the International Auditing and Assurance Standards Board (IAASB), the International Accounting Education Standards Board (IAESB) and the International Ethics Standards Board for Accountants (IESBA). The CAGs’ membership represents a broad range of international stakeholders whose participation helps guarantee the public interest focus of the standard-setting process.
The PIOB also oversees the Compliance Advisory Panel, or CAP, which evaluates member body compliance with the IFAC membership rules, including each member’s progress in promoting the adoption of private and public sector accounting, audit, ethics, and education standards. In turn, the PIOB is accountable to the Monitoring Group, which is currently composed of the following international organizations: the International Organization of Securities Commissions, the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the World Bank, the European Commission and the Financial Stability Board.
These oversight activities work to enhance the independence and integrity of the audit profession, whose job is to provide assurance on the reliability of financial statements.
The following diagram describes the PIOB’s governance and oversight structure:
The PIOB was constituted under Spanish Foundations Law, as Fundación Consejo Internacional de Supervisión Pública en Estándares de Auditoría, Ética Profesional y Materias Relacionadas. It is overseen by the Spanish Foundation Protectorate.