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Member Body ComplianceProgramManuel Sánchez y MadridChair, Compliance Advisory Panel &Russell GuthrieExecutive Director, Q...
Presentation’s Overview•   IFAC’s role and membership profile•   Overview of the Compliance Program•   Transparency and in...
BackgroundWhat is IFAC?• Global organization for the accounting profession,  dedicated to the public interest• Comprised o...
BackgroundIFAC Member Countries                        Page 4 | Confidential and Proprietary Information
BackgroundWhat does IFAC do?• Develops international standards through independent  standard setting boards• Advocates ado...
Background  How does IFAC do it?KEYACCOUNTABILITYOVERSIGHTCONSULTATION/ADVICE                                             ...
BackgroundWho are IFAC members?• Professional Accountancy Organizations (PAOs)     –   Operate in different regulatory env...
Member Body Compliance ProgramCompliance Program: A Brief History   • Prior to 2004 – IFAC was a loose federation of PAOs ...
Member Body Compliance Program7 Statements of Membership Obligations         SMO1 Quality Assurance         SMO2 Internati...
Understanding the SMO Applicability Framework             Degree of responsibility for an SMO area               Direct   ...
Member Body Compliance ProgramFocus on Encouragement and ContinuousImprovement                                 Self -Asses...
Impact / AchievementsTransparency – Website Publication                                     Page 12 | Confidential and Pro...
Impact / AchievementsAction Plan Status              CATEGORY                       STATUS                                ...
Impact / AchievementsValuable Information                        Page 14 | Confidential and Proprietary Information
Impact / AchievementsEnforcement – since 2005 •   57 suspension warnings •   18 suspensions •   9 expulsion warnings •   5...
Impact / AchievementsBeginning of the Road • Action Plans as first step:     • Transparent plans for continuous improvemen...
Impact / AchievementsIntersection with Development Agenda • CAP and staff outreach • Working with Regional Organizations •...
Member Body Compliance ProgramGoing Forward• SMO Revisions – in Progress, expected Nov 2012• Monitoring Progress and Actio...
DiscussionSummary • The Program drives the adoption and implementation   support of international standards      – PAOs ar...
www.ifac.org/ComplianceProgram          www.ifac.org                           Page 20 | Confidential and Proprietary Info...
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IFAC Member Body Compliance Program

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Presentation given by Manuel Sánchez y Madrid, Chair of the IFAC Compliance Advisory Panel, and Russell Guthrie, IFAC Executive Director, Quality and Member Relations, at the International Organization of Securities Commissions (IOSCO) Technical Committee Meeting in March 2012.

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IFAC Member Body Compliance Program

  1. 1. Member Body ComplianceProgramManuel Sánchez y MadridChair, Compliance Advisory Panel &Russell GuthrieExecutive Director, Quality andMember RelationsIOSCO Technical Committee MeetingAmsterdam, The NetherlandsMarch 14, 2012 Page 1 | Confidential and Proprietary Information
  2. 2. Presentation’s Overview• IFAC’s role and membership profile• Overview of the Compliance Program• Transparency and information gathering• Way forward Page 2 | Confidential and Proprietary Information
  3. 3. BackgroundWhat is IFAC?• Global organization for the accounting profession, dedicated to the public interest• Comprised of 167 members and associates in 127 countries• Members and Associates are Professional Accountancy Organizations (PAO)• Represents 2.5 million accountants in public practice, business, government and academia Page 3 | Confidential and Proprietary Information
  4. 4. BackgroundIFAC Member Countries Page 4 | Confidential and Proprietary Information
  5. 5. BackgroundWhat does IFAC do?• Develops international standards through independent standard setting boards• Advocates adoption and supports implementation of international standards• Supports the development and improvement of the profession• Provides guidance for professional accountants in business and small and medium practices Page 5 | Confidential and Proprietary Information
  6. 6. Background How does IFAC do it?KEYACCOUNTABILITYOVERSIGHTCONSULTATION/ADVICE Monitoring IFAC Group COUNCIL Public Audit Nominating Interest Committee Committee Oversight Board IFAC IFAC Regulatory BOARD Liaison Group Planning and Finance Committee Forum Consultative Consultative Consultative Consultative of Firms Advisory Advisory Advisory Advisory Group Group Group Group Professional Professional Small and International International International International Transnational Accountancy Accountants Medium Compliance Auditing and Accounting Ethics Public Sector Auditors Organization in Business Practices Advisory Panel Assurance Education Standards Accounting Committee Development Committee Committee Standards Standards Board for Standards Committee Board Board Accountants Board Page 6 | Confidential and Proprietary Information
  7. 7. BackgroundWho are IFAC members?• Professional Accountancy Organizations (PAOs) – Operate in different regulatory environments – Have different range of responsibilities – Often authority is not with the PAO but government or regulator – Different level of development• All subject to the same benchmark – the SMOs Page 7 | Confidential and Proprietary Information
  8. 8. Member Body Compliance ProgramCompliance Program: A Brief History • Prior to 2004 – IFAC was a loose federation of PAOs • Program and Compliance Advisory Panel launched in 2004 as part of IFAC Reforms • Established Statements of Membership Obligations (SMOs) • PIOB oversight – observers at meetings since 2007 Page 8 | Confidential and Proprietary Information
  9. 9. Member Body Compliance Program7 Statements of Membership Obligations SMO1 Quality Assurance SMO2 International Education Standards SMO3 International Standards on Auditing SMO4 International Code of Ethics SMO5 International Public Sector Accounting Standards SMO6 Investigation and Discipline SMO7 International Financial Reporting Standards Page 9 | Confidential and Proprietary Information
  10. 10. Understanding the SMO Applicability Framework Degree of responsibility for an SMO area Direct Shared No Responsibility Implement all the For the elements for Use best endeavors requirements of the which MB has direct to: SMO responsibility follow the approach for "Direct" a. Encourage those In exceptional responsible for the situations departures AND requirements to are possible if can be follow this SMO injustified from the public For the elements for implementing them; interest perspective which MB has no direct and and need to be responsibility follow the documented approach for b. Assist in the "No Responsibility " implementation where appropriate Page 10 | Confidential and Proprietary Information
  11. 11. Member Body Compliance ProgramFocus on Encouragement and ContinuousImprovement Self -Assessment Overview of national Benchmarking against the 7 regulatory and standard- SMOs setting framework Action Plan Strategic document illustrating a PAOs progress toward, or continued compliance with, SMO requirements Page 11 | Confidential and Proprietary Information
  12. 12. Impact / AchievementsTransparency – Website Publication Page 12 | Confidential and Proprietary Information
  13. 13. Impact / AchievementsAction Plan Status CATEGORY STATUS JAN 2011 JAN 2012 3rd Iteration Published 0 26 2nd Iteration Published 27 68 1st Iteration Published 90 65 Total Published 117 159 Drafts in Review 24 2 Work in Progress 23 6 TOTAL 164 167 Page 13 | Confidential and Proprietary Information
  14. 14. Impact / AchievementsValuable Information Page 14 | Confidential and Proprietary Information
  15. 15. Impact / AchievementsEnforcement – since 2005 • 57 suspension warnings • 18 suspensions • 9 expulsion warnings • 5 expulsions Page 15 | Confidential and Proprietary Information
  16. 16. Impact / AchievementsBeginning of the Road • Action Plans as first step: • Transparent plans for continuous improvement • Annual updates • Monitoring of progress by CAP • Influencing action and transformation • Time and resources needed to achieve meaningful change Page 16 | Confidential and Proprietary Information
  17. 17. Impact / AchievementsIntersection with Development Agenda • CAP and staff outreach • Working with Regional Organizations • Peer Reviewer and Institutional Support to ROSC Accounting and Auditing Reports – SMOs used as benchmarks in ROSC reviews – PAO Action Plans linked with Country Action Plans • Professional Accountancy Organization Development Committee Page 17 | Confidential and Proprietary Information
  18. 18. Member Body Compliance ProgramGoing Forward• SMO Revisions – in Progress, expected Nov 2012• Monitoring Progress and Action Plan Updates• Further transparency on adoption and infrastructure gaps• Continued interaction with the donor community, ROs/AGs and the PAO Development Committee• Leverage the information gathered – improve presentation and user friendliness Page 18 | Confidential and Proprietary Information
  19. 19. DiscussionSummary • The Program drives the adoption and implementation support of international standards – PAOs are instrumental in supporting the adoption and implementation of auditing and financial reporting standards and ethical requirements • IFAC staff have deep technical knowledge of professional, regulatory and legal environments in over 120 countries – IFAC staff = 7 full time technical staff devoted to Program and development of the profession in emerging economies • How can this contribute to the work of IOSCO? Page 19 | Confidential and Proprietary Information
  20. 20. www.ifac.org/ComplianceProgram www.ifac.org Page 20 | Confidential and Proprietary Information

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