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The Revised SMOs: What You Need To Know

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Presentation given by Szymon Radziszewicz, IFAC Senior Technical Manager, during a seminar on the IFAC Statements of Membership Obligations (SMOs) at the Federation of Accounting Professions in Thailand.

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The Revised SMOs: What You Need To Know

  1. 1. The Revised SMOs:What You Need to KnowSzymon RadziszewiczSenior Technical ManagerIFACIFAC SMO Workshop for AFAApril 7, 2013Bangkok, Thailand Page 1 | Confidential and Proprietary Information
  2. 2. Revised SMOsLet’s Put the Pieces Together • What are SMOs • Why Revise • Key Concepts • Structure • Key Revisions • What PAOs Need To Do Page 2 | Confidential and Proprietary Information
  3. 3. Revised SMOsWhat are the SMOs • In accordance with IFAC Constitution, IFAC members and associates are required to comply with the SMOs • Member and associates have to identify and take actions to fulfill the requirements set out in the SMOs Page 3 | Confidential and Proprietary Information
  4. 4. What are SMOsPower to Grow • Clear benchmarks for PAOs • Enable high quality performance by professional accountants • Encourage continuous improvement • Drive sustainable development of the accountancy profession Page 4 | Confidential and Proprietary Information
  5. 5. What are SMOsBuilding Blocks SMO 4: Ethics SMO 7: SMO 3: SMO 5: IFRS ISA IPSAS SMO 2: Education Page 5 | Confidential and Proprietary Information
  6. 6. Revised SMOsWhy Revise? • Serve the public interest • Drive adoption and implementation of international standards • Clarify • Reflect international good practice • Increase effectiveness of IFAC Compliance Program Page 6 | Confidential and Proprietary Information
  7. 7. Revised SMOsKey Concepts • Shall = requirement • Applicability Framework • Comply or explain • Best endeavors • Compliance Program Page 7 | Confidential and Proprietary Information
  8. 8. Key ConceptsUnderstanding Diversity Different Regulatory Sectors of degree of frameworks profession responsibility Page 8 | Confidential and Proprietary Information
  9. 9. Applicability Framework Degree of responsibility for an SMO area No Direct Shared Responsibility For the elements for Use best endeavors to: Implement all the which Member Body requirements of the has direct a. Encourage those SMO responsibility follow responsible for the the approach for requirements to follow In exceptional situations "Direct" this SMO in departures are possible implementing them; if can be justified from AND the public interest AND perspective and need to For the elements for be documented which Member Body has no direct b. Assist in the responsibility follow implementation where the approach for appropriate "No Responsibility " Page 9 | Confidential and Proprietary Information
  10. 10. Revised SMOsStructure of the SMOs Obligation Scope Applicability Framework Requirements and Application Guidance IFAC Compliance Assessment Page 10 | Confidential and Proprietary Information
  11. 11. Revised SMOsKey Revisions • SMOs 2, 3, 4, 5, 7 • SMO 1 • SMO 6 Page 11 | Confidential and Proprietary Information
  12. 12. SMOs 2, 3, 4, 5, 7Adoption Decision Action to make the decision effective Page 12 | Confidential and Proprietary Information
  13. 13. SMOs 2, 3, 4, 5, 7Different Approaches – One Goal Adoption Transposition Page 13 | Confidential and Proprietary Information
  14. 14. SMOs 2, 3, 4, 5, 7ImplementationDissemination Implementation of standards guidanceEducation and Raising training awareness Page 14 | Confidential and Proprietary Information
  15. 15. SMOs 2, 3, 4, 5, 7Translation • Assess priorities and challenges • Is there a need of translation to ensure proper adoption and implementation • Process for timely, accurate and complete translation Page 15 | Confidential and Proprietary Information
  16. 16. SMO 1Quality Assurance Consider QA performed by another authority to avoid overlap Extension of the scope to ALL audits of financial statements (priority for PIE audits) Ensure sufficient resources Refer to I&D if no corrective action Consideration of Public Oversight Review of implementation and effectiveness Page 16 | Confidential and Proprietary Information
  17. 17. SMO 6Investigation & Discipline Improved logic flow Initiation of proceedings – both complaints and information based Improved linkage between SMO 1 and SMO 6 Proportionality of sanctions Public interest considerations Liaison with outside bodies Review of implementation and effectiveness Page 17 | Confidential and Proprietary Information
  18. 18. Revised SMOsWhat PAOs Need To Do • Review and understand revisions • Consider actions necessary to address revisions • Plan and execute actions • Cooperate within RO/AG • Reflect actions in the next update of the SMO Action Plan Page 18 | Confidential and Proprietary Information
  19. 19. It All Fits TogetherStrong Global Accountancy Profession Page 19 | Confidential and Proprietary Information
  20. 20. Compliance ProgramProgress File Notes Page 20 | Confidential and Proprietary Information
  21. 21. Breakout Session• Group 1: Focusing on Adoption & Implementation – Countries: Singapore, Myanmar – Facilitator: Sylvia – With input from: James & Phoebe• Group 2: Focusing on Investigation & Discipline – Countries: Brunei, Cambodia, Malaysia – Facilitator: Marta – With input from: Lucia & Andrew• Group 3: Focusing on Quality Assurance – Countries: Indonesia, Philippines, Thailand – Facilitator: Szymon – With input from: Jonathan & Reza Page 21 | Confidential and Proprietary Information

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