PrintPublic Interest:
That which is coincident and commensurate with promoting and protecting the integrity, inclusiveness, transparency and fairness of international markets and enhancing the stability of the global financial system. It is served through independent oversight, strict due process, open consultation and transparency. The audit process and the standards by which the audit is conducted are major contributors to the quality of financial reporting. Thus they help enhance the stability of the global financial system.
(link to IFAC Public Interest Framework)
International Federation of Accountants:
The global organization representing the accountancy profession. IFAC is committed to protecting the public interest by developing high-quality international standards, promoting strong ethical values, encouraging quality practice, and supporting the development of all sectors of the profession around the world. The IAASB, IAESB, and IESBA are three of IFAC’s independent standard-setting boards.
The International Auditing and Assurance Standards Board:
The independent standard-setting board that develops International Standards of Auditing and other pronouncements dealing with auditing, review, other assurance, quality control, and related services. The PIOB oversees the work of the IAASB.
The International Accounting Education Standards Board:
The IAESB’s pronouncements that address the principles of learning and development for professional accountants. They prescribe good practice in learning and development for professional accountants and should be incorporated into the educational requirements of IFAC member bodies.
The International Ethics Standards Board for Accountants
The international standard-setting board that develops ethical standards and other pronouncements for use by professional accountants. The PIOB oversees the work of the IESBA.
The International Organization of Securities Commissions:
IOSCO is the cooperative forum for securities regulatory agencies and international standard setters for securities markets.
The Basel Committee on Banking Supervision:
The BCBS is the international body comprising central banks and banking supervisory authorities from certain key markets that formulates and encourages convergence toward broad supervisory standards, guidelines, and statements of best practice.
The International Association of Insurance Supervisors:
The IAIS is the global organization that represents insurance regulators and supervisors, issues global insurance principles, standards and guidance papers, provides training and support on related issues, and promotes effective insurance supervisory regimes.
The World Bank:
The World Bank is the international financial institution that provides financial and technical assistance to developing countries while seeking to reduce global poverty and improve living standards.
The European Commission:
The EC is the executive branch of the European Union (EU). The EC may make legislative proposals and is ultimately responsible for the implementation of EU legislation throughout member states.
The Financial Stability Board:
The forum that promotes international financial stability, improved functioning of markets and reduced systemic risk through information exchange, cooperation in financial supervision and surveillance, and coordination of efforts. The FSB brings together representatives of national financial authorities responsible for financial stability in significant international financial centers, international financial institutions, international regulatory and supervisory groupings, and committees of central bank experts.
www.financialstabilityboard.org
Consultative Advisory Groups:
CAGs are groups in which stakeholder organizations, and notably regulators, public interest entities and users of financial statements are represented. CAGs do not set standards; they are required to offer assurance that the standards and strategic plans produced by their respective standard-setting boards are responsive to their review and comments, and reflect public interest priorities.
Compliance Advisory Panel:
The panel responsible for overseeing the implementation and operation of the IFAC Member Body Compliance Program. The objective of this program is to evaluate the quality of IFAC member and associate member bodies’ endeavors to meet the requirements of IFAC membership. The PIOB oversees the work of the CAP.
Monitoring Group:
The regulatory and international organization responsible for monitoring implementation of IFAC reform. The MG nominates PIOB members and engages in dialogue with the international accountancy profession, receives operating and financial reports from the PIOB, and updates the PIOB regarding significant events in the regulatory environment. Members of the MG are the Basel Committee on Banking Supervision, the European Commission, the International Association of Insurance Supervisors, the International Organization of Securities Commissions, the World Bank, and the Financial Stability Board; the International Federation of Independent Audit Regulators is an observer.
Public Interest Activity Committees:
The groups established under the auspices of the IFAC consisting of three independent standard-setting boards—IAASB, IAESB, and IESBA—and the CAP. Each board is composed of practitioner, non-practitioner, and public members and is subject to PIOB oversight.
Terms of Reference:
The document that sets out the objective, scope of activities, and membership for each of the IAASB, IAESB, IESBA, their respective CAGs, and the CAP. These documents are available on the IFAC website.
Clarity project:
A comprehensive IAASB program that enhanced the quality and consistency of global audit practice by applying a new drafting format to all existing and future International Standards of Auditing. The drafting conventions adopted for this purpose involved a new three-part structure—objectives, requirements, and application guidance—and simplified English to clarify intent, improve understandability, and facilitate translation. This project was completed in December 2008.
Code of Ethics for Professional Accountants:
The Code is an IESBA initiative that enhanced the clarity and understandability of the provisions of the IFAC Code of Ethics for Professional Accountants through the application of new drafting conventions. These conventions focused on clarifying the language and did not change the fundamental structure of the code.
Statements of Membership Obligations:
The seven statements issued by the IFAC that establish requirements for IFAC members and associates to promote, incorporate, and assist in implementing international standards issued by IAASB, IAESB, IESBA, and the International Accounting Standards Board. The SMOs also establish requirements for quality assurance and investigation and disciplinary activities.
http://www.ifac.org/publications-resources/statements-membership-obligations-smos-1-7-revised
The International Accounting Standards Board:
The London-based IASB is an independent, privately-funded accounting standard-setter that formulates the International Financial Reporting Standards (IFRSs)
The International Public Sector Accounting Standards Board:
The IPSASB is the IFAC standard-setting board that issues the global financial reporting standards for application by public sector entities other than government business enterprises. It is not overseen by the PIOB.
(first five-year review) Link to the MG Report on the Review of the 2003 IFAC Reform
Link to world map on adoption of ISAs
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Appendix B – Glossary of Terms
This glossary has been prepared to guide readers of this report by explaining various terms used in its preparation. It is not intended to be used or cited as a source of authoritative definitions.
Accountancy: the profession of accounting. Accounting comprises measurement, preparation, validation, disclosure, auditing of, and provision of assurance and advisory services on financial information.
Action plan: a document that the IFAC Member Body Compliance Program requires members and associates to prepare, identifying the tools, resources, and regulatory changes needed to advance their best endeavors to promote and incorporate international standards issued by IFAC and the IASB, quality assurance, and investigation and disciplinary programs.
Basel Committee on Banking Supervision (BCBS): an international body comprising central banks and banking supervisory authorities from certain key markets that formulates and encourages convergence toward broad supervisory standards, guidelines, and statements of best practice.
Basis for Conclusions: a final public accountability document prepared at the conclusion of a standard-setting or other approved PIAC project and published on the IFAC website. The Basis for Conclusions provides background information on the project, sets out the main comments received in response to the exposure draft, explains how the relevant standard-setting board has addressed these comments, and provides the rationale used to support the board’s conclusions. This document is not part of the approved final pronouncement and is not authoritative.
Call for nominations: a document published by IFAC early each year, designed to help IFAC to find the best person for each vacancy on its boards and committees, while also achieving a gender, regional, and professional balance. This publication also contains strategic and practical advice for nominating organizations, allowing them to make informed decisions in selecting their nominees and to understand what is expected of them.
Clarity project: a comprehensive IAASB program that enhanced the quality and consistency of global audit practice by applying a new drafting format for all existing and future International Standards of Auditing. The drafting conventions adopted for this purpose involved a new three-part structure—objectives, requirements, and application guidance—and simplified English to clarify intent, improve understandability, and facilitate translation. This project was completed in December 2008.
Code of Ethics for Professional Accountants (redrafted): an IESBA initiative that enhanced the clarity and understandability of the provisions of the IFAC Code of Ethics for Professional Accountants through the application of new drafting conventions. These conventions focused on clarifying the language and did not change the fundamental structure of the code.
Compliance Advisory Panel (CAP): a panel responsible for overseeing the implementation and operation of the IFAC Member Body Compliance Program. The objective of this program is to evaluate the quality of the endeavors of IFAC members and associate members to meet the requirements of IFAC membership. The PIOB oversees the work of the CAP.
Consultative Advisory Group (CAG): groups constituted to provide advice, including technical advice, to one of the following: IAASB, IAESB, and IESBA. Regular interaction between each CAG and its respective standard-setting board is part of the board’s formal consultation processes. The PIOB oversees the work of each CAG.
Due process completion: the point at which the established and approved due process to be followed by the IAASB, IAESB, and IESBA in developing international pronouncements is determined to be complete. Prior to publication of an international pronouncement, the PIOB receives certification from the IFAC executive director for professional standards that all required due process steps have been completed. The PIOB’s decision is based on evaluation of this certificate together with the results of its own oversight activities.
Direct observation (DO): oversight procedure where a PIOB member physically attends a PIAC meeting and is able to make comments or recommendations instantly.
European Commission (EC): the executive branch of the European Union (EU). The EC may make legislative proposals and is ultimately responsible for the implementation of EU legislation throughout member states.
Extended review framework (ERF): a risk-based framework that provides the PIOB with an additional measure of independent analysis and assessment of the due process applied in the development and finalization of a specific standard, practice statement, other authoritative international pronouncement, or PIAC Strategy and Work Plan.
Financial Stability Board (FSB): a board established to coordinate at the international level the work of national financial authorities and international standard-setting bodies and to develop and promote the implementation of effective regulatory, supervisory, and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. The Financial Stability Forum was the predecessor to the FSB.
Forum of Firms (FoF): a forum that brings together firms performing transnational audits and involves them more closely with the activities of IFAC. The FoF is dedicated to promoting consistent and high-quality standards of financial reporting and auditing practices worldwide.
Framework for International Education Standards for Professional Accountants: an IAESB document that introduces the IAESB’s pronouncements and related IFAC membership obligations, as it deals with key educational concepts, different types of IAESB pronouncements, and obligations of the IFAC member bodies on education standards.
Independence II project: an IESBA project that updated some independence requirements contained in the IFAC Code of Ethics for Professional Accountants.
Integrated reporting initiative: a project promoting a comprehensive corporate reporting framework that integrates financial, environmental, social, and governance information.
International Accounting Education Standards Board (IAESB): an independent standard-setting board that develops International Education Standards (IESs) and other pronouncements for professional accountants. These pronouncements deal with education, practical experience, tests of professional competence for accreditation, and the nature and extent of continuing professional education. The PIOB oversees the work of the IAESB.
IAESB drafting conventions: IAESB’s equivalent to the IAASB’s Clarity project.
International Association of Insurance Supervisors (IAIS): a global organization that represents insurance regulators and supervisors, issues global insurance principles, standards, and guidance papers, provides training and support on related issues, and promotes effective insurance supervisory regimes.
International Auditing and Assurance Standards Board (IAASB): an independent standard-setting board that develops International Standards of Auditing and other pronouncements dealing with auditing, review, other assurance, quality control, and related services. The PIOB oversees the work of the IAASB.
International Education Standards (IESs): IAESB pronouncements that address the principles of learning and development for professional accountants. They prescribe good practice in learning and development for professional accountants and should be incorporated into the educational requirements of IFAC member bodies.
International Ethics Standards Board for Accountants (IESBA): an international standard-setting board that develops ethical standards and other pronouncements for use by professional accountants. The PIOB oversees the work of the IESBA.
International Federation of Accountants (IFAC): a global organization representing the accountancy profession. IFAC is committed to protecting the public interest by developing high-quality international standards, promoting strong ethical values, encouraging high-quality practice, and supporting the development of all sectors of the profession around the world. The IAASB, IAESB, and IESBA are three of IFAC’s independent standard-setting boards.
IFAC Code of Ethics for Professional Accountants: a document that establishes ethical requirements for professional accountants and provides a conceptual framework for them to ensure compliance with the five fundamental principles of professional ethics: integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. Under this 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.
IFAC Member Body Compliance Program: a program to determine member bodies’ compliance with a series of Statements of Membership Obligations (SMOs) that require these bodies, on a best endeavors basis, to promote the adoption and assist in the implementation of international auditing, accounting, ethical, and educational standards as well as quality assurance and enforcement mechanisms. In part 1 of this program, member bodies provide fundamental information about their structure and operations. In part 2, members undertake a self-assessment of their level of compliance with each of the seven SMOs. Based on IFAC evaluation of part 2 information and member body agreement on areas for improvement, part 3 requires member bodies to develop a proposed action plan for IFAC approval and to execute the approved plan.
IFAC Nominating Committee: a committee that recommends to the IFAC board the appointment of chairs, deputy chairs, members, and public members for IFAC PIACs. The PIOB has the right to observe and speak at Nominating Committee meetings with respect to PIAC appointments.
IFAC 2003 reform: the introduction of processes for oversight and monitoring designed to strengthen IFAC international standard setting, achieve convergence to international standards, and ensure that the international accountancy profession is responsive to the public interest.
International Forum of Independent Audit Regulators (IFIAR): a forum of national audit regulators from several jurisdictions that conduct inspections of auditors and audit firms. Among its objectives are the sharing of knowledge and practical experience, promotion of collaboration and consistency in regulatory activity, and engagement with other organizations with an interest in audit quality.
International Organization of Securities Commissions (IOSCO): a cooperative forum for securities regulatory agencies and international standard setters for securities markets.
International Public Sector Accounting Standards (IPSASs): global financial reporting standards for application by public sector entities other than government business enterprises, issued by IFAC’s International Public Sector Accounting Standards Board.
Monitoring Group (MG): a regulatory and international organization responsible for monitoring implementation of IFAC reform. The MG nominates PIOB members and engages in dialogue with the international accountancy profession, receives operating and financial reports from the PIOB, and updates the PIOB regarding significant events in the regulatory environment. Members of the MG are the Basel Committee on Banking Supervision, the European Commission, the International Association of Insurance Supervisors, the International Organization of Securities Commissions, the World Bank, the Financial Stability Board and the International Forum of Independent Audit Regulators.
Monitoring Group’s Review of the IFAC Reforms: the first five-year review of the progress of the 2003 reforms. Issued in November 2010, the review stated that virtually all of the changes called for by the IFAC reforms had been implemented. It also identified possible areas where the existing system could be further improved to meet future challenges. As part of the review process, the PIOB submitted a self-assessment report to the MG and a comment letter on the MG exposure draft.
Monitoring and reporting (M&R): oversight procedure by which PIOB staff monitors PIAC meetings after they have taken place. This includes analyzing PIAC meeting documents related to the development of standards and the minutes for the particular meeting.
Oversight assurance model: four models that guide the nature and scope of the PIOB’s oversight work for the year. Each model offers a different level of assurance, and the level chosen for each PIAC should be of sufficient intensity to enable the PIOB to conclude whether the activities of PIACs and the CAGs follow due process and safeguard the public interest.
Oversight Plan for PIACs: an annual plan that describes the oversight assurance model and oversight procedures that will be applied by the PIOB in PIAC oversight. These plans are drawn up by the PIOB team leaders of each PIAC.
Observation memo: a document developed by either PIOB members or staff after carrying out an oversight assignment to assess the meeting observed or monitored.
Public consultation: various types of public engagement between a standard-setting board and a broad spectrum of external interested parties. The standard-setting board may hold one or more public forums or roundtables or issue a consultation paper in order to solicit views on a matter under consideration. All draft international pronouncements are published as exposure drafts on the IFAC website for public comments, which constitutes the “exposure period.” In addition to comments made by respondents to an exposure draft, the standard-setting board seeks advice from its CAG and may also consider whether to conduct a field test of its proposals. After approving the revised content of an exposed international pronouncement, the standard-setting board assesses whether substantive changes have been made to the document that may warrant another exposure.
Public Interest Activity Committee (PIAC): groups established under the auspices of IFAC consisting of three independent standard-setting boards—IAASB, IAESB, and IESBA—and the CAP. Each board is composed of practitioner, non-practitioner, and public members and is subject to PIOB oversight.
Public Interest Oversight Board (PIOB): an independent body that is nominated by the Monitoring Group and is responsible for approving appointments and conducting ongoing oversight of IFAC public interest activities. The PIOB’s mandate requires it to increase public confidence that those activities are properly responsive to the public interest.
Remote observation (RO): an oversight procedure by which PIOB staff join a PIAC meeting via teleconference.
Statements of Membership Obligations (SMOs)1: seven statements issued by the IFAC that establish requirements for IFAC members and associates to promote, incorporate, and assist in implementing international standards issued by the IAASB, IAESB, IESBA, and the International Accounting Standards Board. The SMOs also establish requirements for quality assurance and investigation and disciplinary activities.
Team leader: a PIOB member assigned to coordinate the oversight activity of a particular PIAC throughout a given year.
Terms of reference: a document that sets out the objective, scope of activities, and membership for each of the IAASB, IAESB, IESBA, their respective CAGs, and the CAP. These documents are available on the IFAC website.
World Bank: an international financial institution that provides financial and technical assistance to developing countries, while furthering its mission to reduce global poverty and improve living standards.