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Arnold Schilder Named to Lead IFAC'sInternational Auditing and AssuranceStandards BoardThe Board of the IFAC has appointed Prof. Dr. ArnoldSchilder, RA, to lead the International Auditing andAssurance Standards Board (IAASB), an independentstandard-setting board under the auspices of IFAC,beginning January 1, 2009. Prof. Schilder's appointment toa three-year term as IAASB Chair was approved by thePublic Interest Oversight Board (PIOB)*, which oversees theIAASB's activitiesAs chair, Prof. Schilder will lead the IAASB in itsinitiatives in setting high quality auditing and assurancestandards and facilitating the convergence of internationaland national standards. He will play a key role in guidingthe IAASB as it strives to enhance the quality anduniformity of audit practice throughout the world and tobuild public confidence in financial reporting."I am delighted to chair the IAASB during the nextthree years as it continues to fulfill its public interestmission," states Prof. Schilder. "I will welcome the input ofall our stakeholders, including users of IAASB standards,national standard setters, regulators, governments, andthe public, as the IAASB addresses new assurance topics aswell as promotes further the benefits of its standards to keyconstituencies that have not yet adopted them.""Arnold Schilder brings both a breadth and depth ofexperience and strong integrity to the position of IAASBChair," states Fermín del Valle, IFAC President. "As its nextchair, he will lead the IAASB in continuing to develop highquality international audit standards to be used around theworld." Prof. Schilder is currently Executive Director of DeNederlandsche Bank NV, the prudential supervisor offinancial institutions in the Netherlands.For more information about the work of the IAASB,visit its home page at http://www.iaasb.org.(Source: www.ifac.org)IFAC Program Sparks Initiatives toStrengthen the AccountancyProfession and Achieve Convergenceto International StandardsThe IFAC Member Body Compliance Program, launched fouryears ago, has reached a major milestone in its mission toencourage accountancy organisations worldwide to worktogether with their members, regulators, standard setters,and other key stakeholders to strengthen the profession.The Compliance Program is comprised of a three-part process:• A member organisation's assessment of its country'sregulatory and standard-setting framework;• A self-assessment of the extent to which a memberbody has committed to international convergence ofstandards and promoted the implementation ofstrong quality assurance and enforcement regimes asspecified in IFAC membership requirements; and• The development of action plans to further theconvergence process and meet other IFACmembership requirements.The Compliance Program is now in this third phaseand, the actions plans of IFAC members from six countries werepublicly released on the IFAC website. The six members are:• Federación Argentina de Consejos Profesionales deCiencias Económicas;• Botswana Institute of Accountants;• Chinese Institute of Certified Public Accountants;• Chamber of Auditors of the Czech Republic;• Institute of Certified Public Accountants of Kenya; and• Corpul Expertilor Contabili si Contabililor Autorizatidin Romania.Representing four different continents, these actionsplans are reflective of the kinds of programs and activitiesthat all IFAC member organisations are developing in theirown jurisdictions."These action plans demonstrate the leadership of theprofession in engaging country stakeholders, such asregulators, government officials, academics, and others infurther enhancing the quality of the profession andensuring greater consistency worldwide," states RobertMednick, Chair of the Compliance Advisory Panel thatoversees the Member Body Compliance Program."Our expectation is that all of IFAC's 157 memberbodies in both developed and emerging countries willdevelop actions plans that address the key elements ofconvergence, the subsequent implementation of standardsand new regulatory initiatives," added Mednick.To view the actions plans of IFAC member bodies aswell as the responses to Parts 1 and 2 of the ComplianceProgram, go to http://www.ifac.org/ComplianceAssessment/published.php.(Source: www.ifac.org)IAASB Issues Auditing Standard onRelated Parties; Makes FurtherProgress on Clarity StandardsFollowing the consideration and approval of due process bythe Public Interest Oversight Board (PIOB), the InternationalAuditing and Assurance Standards Board (IAASB), anindependent standard-setting board under the auspices ofthe IFAC, on July 14, 2008 released International Standardon Auditing (ISAs) 550 (Revised and Redrafted), RelatedParties and three clarity redrafted ISAs.32 | The Malaysian Accountant | August 2008 www.micpa.com.my
Related PartiesThe involvement of related parties in major corporatescandals encouraged the IAASB to revise its current auditingstandard on the subject. The revised Related Partiesstandard clarifies the meaning of "related party" for purposesof an audit. It also makes clear the auditor's responsibilityto obtain sufficient evidence about the required accountingand disclosure of related party relationships andtransactions and to understand how such relationships andtransactions affect the view given by the financial statements."The standard will strengthen current auditing practicein this area by emphasising the need for the auditor tounderstand related party relationships and transactions inorder to identify the risks of material misstatement to whichthese may give rise, and directing the auditor to focus work efforton the assessed risks of material misstatement, includingthose due to fraud," explains John Kellas, IAASB Chairman."The revised standard clarifies the auditor's responsibilitiesin those cases where the financial reporting frameworkestablishes minimal or no related party requirements. Inaddition, it provides enhanced guidance to assist the auditorin understanding and responding to the risks of materialmisstatement that may arise in relation to related partieswith dominant influence," emphasises Kellas.Clarity Redrafted ISAsIn addition to ISA 550 (Revised and Redrafted), the IAASBhas also released the following clarity redrafted ISAs:• ISA 250 (Redrafted) - Consideration of Laws andRegulations in an Audit of Financial Statements;• ISA 510 (Redrafted) - Initial Audit Engagements-Opening Balances; and• ISA 570 (Redrafted) - Going Concern.They form part of the IAASB's ambitious 18-monthprogram to redraft existing standards following the claritydrafting conventions. To date, the IAASB has released 15final clarity redrafted ISAs. The IAASB is on track to finalizeits complete set of clarified ISAs by the end of this year.The complete set of clarified ISAs, including newlyrevised standards such as ISA 550 (Revised and Redrafted),will be effective for audits of financial statements forperiods beginning on or after December 15, 2009.The ISAs can be downloaded free-of-charge from theIFAC online bookstore at http://www.ifac.org/store.(Source: www.ifac.org)IFAC’s International Auditing andAssurance Standards Board IssuesStrategy and Work Program for 2009-2011The International Auditing and Assurance StandardsBoard (IAASB), an independent standard-setting boardunder the auspices of the IFAC, on July 14, 2008 releasedits Strategy and Work Program, 2009-2011. The three-yearstrategy includes an emphasis on the development ofstandards that contribute to the effective operation of theworld's capital markets and that address the needs of smallandmedium-sized entities and small and mediumpractices.The Strategy and Work Program, issued followingconsideration and approval of its completeness from apublic interest perspective by the Public Interest OversightBoard (PIOB)*, is consistent with the IAASB's overallobjectives. ** It builds on the strong base of standardsdeveloped by the IAASB to date and focuses on three areas:• The development of standards;• The facilitation and monitoring of adoption of thosestandards; and• Responding to concerns about the implementation ofthe standards by activities designed to improve theconsistency with which they are applied in practice."The IAASB's vision is that the high quality standardson assurance, related services and, in particular,International Standards on Auditing that we develop in thepublic interest are adopted and applied internationally.The strategy and work program are consistent with thislonger term vision," explains John Kellas, IAASB Chairman.The Strategy and Work Program responds to significantdevelopments in the environment in which audit and otherassurance services are performed, and in which standardsfor such services are set. It also highlights the IAASB role inworking toward global acceptance of and convergence withits standards and in establishing and maintaining relevantpartnerships. It is underpinned by the IAASB's communicationsinitiatives to keep stakeholders informed of its activitiesand to promote adoption and implementation of itsstandards.The Strategy and Work Program reflects the outcome ofan extensive consultation program to obtain the widestpossible input into determining the IAASB's priorities overthe next three years. A summary of the IAASB's conclusionswith regard to significant matters raised during theseconsultations is presented in the Basis for Conclusions:IAASB Strategy and Work Program, 2009-2011."I am grateful to the many people and organizationsthat contributed to our strategy review consultations. Ihope that the direction of our work will be seen asresponding to the representations made to us, and to thepublic interest, which must be our overriding concern. Ofcourse, events and circumstances may require us to amendour program, and for this reason it will be kept underconstant review," notes Kellas.The Strategy and Work Program, 2009-2011 can bedownloaded free-of-charge from the IFAC online bookstore(http://www.ifac.org/store). To access the related Basis forConclusions and other information on the IAASB's work,www.micpa.com.myAugust 2008 | The Malaysian Accountant |33
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