1. International Federation of Accountants A&IS/CAP/DNC Report Russell Guthrie Executive Director, Quality and Member Relations IESBA Meeting New York City, New York February 17, 2009

2. What we know today Adoption and Implementation Support Compliance Program – –Status Developing Nations initiatives Specific matters for IESBA consideration – –Adoption and Implementation – –SMO Revisions Topics to be Covered

3. Developing Nations Committee Lack of stakeholder engagement Outdated legal frameworks Weak accountancy professional organizations Widespread non-compliance with standards Weak monitoring/enforcement mechanisms Lack of access to (translated) international standards and related implementation guidance Inadequate training and curricula/poor linkage with academia Challenges

4. Adoption and Implementation Support AdoptionAdoption –Advocacy –Policy Advice IFAC – Beyond Standard Setting

5. Adoption and Implementation Support Implementation SupportImplementation Support –Availability –Accessibility (Translations) –Application Support –Core Training and Education Materials (currently deferred due to resource constraints) IFAC – Beyond Standard Setting

6. Member Body Compliance Program SMO 1 Quality AssuranceSMO 1 Quality Assurance SMO 2International Education StandardsSMO 2International Education Standards SMO 3International Standards on AuditingSMO 3International Standards on Auditing SMO 4International Code of EthicsSMO 4International Code of Ethics SMO 5 International Public Sector Accounting StandardsSMO 5 International Public Sector Accounting Standards SMO 6Investigation and DisciplineSMO 6Investigation and Discipline SMO 7International Financial Reporting StandardsSMO 7International Financial Reporting Standards Statements of Membership Obligations (SMOs)

7. Member Body Compliance Program Part 1 – Fact-based questionnaire on the regulatory and standard-setting framework in a member’s home countryPart 1 – Fact-based questionnaire on the regulatory and standard-setting framework in a member’s home country Part 2 – Self-assessment of compliance with specific requirements of the SMOsPart 2 – Self-assessment of compliance with specific requirements of the SMOs Part 3 – Members and associates develop action plans to address gapsPart 3 – Members and associates develop action plans to address gaps Assessing Compliance

9. Member Body Compliance Program 76 – Published Action Plans 39 – Drafts received and under review 40 – In progress but no submitted draft 3 – Suspensions 1 – Expulsion to be considered by Board – Feb Status of Preparation of Action Plans as of February 1, 2010

10. Member Body Compliance Program Soft updates –Completed after six months –Based on interviews with key individuals Obtain understanding of current progress Obtain understanding of current progress Encourage continuing communication Encourage continuing communication Offer to be of further assistance Offer to be of further assistance –Memorandum prepared for archives and CAP review Monitoring of Published Action Plans

11. Member Body Compliance Program –20 completed as of February 1, 2010 Overall member bodies generally remain on track Overall member bodies generally remain on track Some delay caused by changes in regulatory environment or change in priorities Some delay caused by changes in regulatory environment or change in priorities Also noted a number of positive developments Also noted a number of positive developments Annual progress reports –Include submission of updated Action Plans –10 completed or actively in progress Monitoring of Published Action Plans

12. Member Body Compliance Program Meaningful execution of Action Plan depends on: –Ability of developing bodies to clearly communicate their challenges, required actions, and need for resources –Willingness of national government and donor agencies to provide support and financial resources –Development of useful implementation tools by the DNC and standard setters –Support of regional organizations and developed bodies serving as mentors/partners Need for Financial and Technical Resources to Achieve Desired Actions

13. Member Body Compliance Program Clarification and increased consistency including –“No less stringent standards” SMO 4 (Ethics) –Statement of applicability in SMO 7 (IFRS+IFRS-SMEs) Member body governance practices Corporate governance (OECD principles)? Review of QA and I&D –Public oversight for auditors of PIEs? Program to Review the SMOs (2010-2012)

14. Developing Nations Committee Tools and Guidance –Establishing and Strengthening Professional Accountancy Organizations –Technicians Guidelines –Mentoring Guidelines Advocacy and Liaison with Donor Community Capacity building to support Public and Private sector Financial Management Key activities

15. Developing Nations Committee Mentoring/Twinning by Developed Bodies Outreach –Professional Accountancy Organizations –Governments –Firms Key activities

16. Compliance Program –Limited to self assessment and limited external validation Adoption challenges –Principles and rules at a national level often embedded in legislation, regulation and member body governance documents Implementation challenges –Overcoming cultural barriers Code of Ethics – Specific Matters

17. Definition of “Professional Accountant” SMO 4 Revision – other considerations –Consistency – convergence, translation, etc. –IFAC Member Obligations CoE applicable to a wide group of stakeholders CoE applicable to a wide group of stakeholders SMO establishes member body obligations SMO establishes member body obligations “No less stringent standards” “No less stringent standards” Code of Ethics – Specific Matters

18. Adoption and Translation Adoption/Translation/Advocacy Activity Netherlands Nigeria Romania Russia Scotland Slovakia Spain South Africa Swaziland Tanzania Ukraine Zambia Australia Cambodia France Finland Germany Hong Kong Iceland Ireland Kenya Latvia Macedonia Mauritius

19. International Federation of Accountants www.ifac.org