1. Standing for trust and integrity Perspectives of the European Accountancy Profession Olivier Boutellis-Taft FEE Chief Executive

2. Standing for trust and integrity 2 Contents  About FEE  Policy update & challenges  Auditing and assurance services  Ethics and independence  Financial reporting  Beyond financial reporting and auditing  Profession’s perspective on key debates

3. Standing for trust and integrity 3 About FEE  43 professional institutes of accountants  32 European countries, including all 27 EU

4. Standing for trust and integrity 4 Representing the profession  Combined membership of more than 500,000 professional accountants  In public practice, business, government, and education  All contributing to a more efficient, transparent, and sustainable European economy  Recognising the public interest

5. Standing for trust and integrity 5 Adding value to members  Making representations to the EU Institutions and to international organisations  Identifying, analysing and influencing relevant public policy developments  Promoting co-operation among Members

6. Standing for trust and integrity 6 Advancing members’ activities Company Law Corporate Governance Ethics Auditing Accounting Insurance Banks Financial Reporting Sustainability Qualification and Market Access SMEs-SMPs Public Sector Taxation And more…

7. Standing for trust and integrity 7 FEE Reach out  Position papers, research, studies, comment letters, press releases  Executive Communiqué  Weekly e-update  Newsletter  Annual Review  New initiative: Telebriefings  More information, more timely, more regularly  More interaction with all Member Bodies, esp. more distant and smaller ones  More accessible (for SMPs)  More time and cost efficient  More carbon efficient and environmentally friendly

8. Standing for trust and integrity 8 Auditing (1)  Statutory Audit Directive (May 2006) to be implemented by EU Member States by July 2008, but on 31 July 2009:  Commission has not yet checked national transpositions  Many Member States are still executing the changes  6 have not yet fully implemented the Directive: Austria, Estonia, Ireland, Italy, Luxembourg and Spain They hope to implement in 2009 Commission plans to take them to the European Court of Justice

9. Standing for trust and integrity 9 Auditing (2)  More work to do on:  International cooperation on public oversight  Limiting auditors’ liability EC Recommendation of 6 June 2008; Member States to report by 5 June 2010  Adoption of International Standards on Auditing (ISAs) in the EU EC Consultation on Adoption of ISAs Debate on proportionality in SME audits

10. Standing for trust and integrity 10 Other Assurance Services  Need to get clarity on assurance on non-financial information  Assurance on corporate governance statements  Assurance on sustainability reports  FEE paper on alternative assurance engagements (i.e. other than the audit)  Developments should be accelerated at international level (IAASB) and slowed down at national level to avoid further fragmentation

11. Standing for trust and integrity 11 Ethics & Independence  Principles in Articles 21 & 22 of the Directive  EC 2002 Recommendation on independence still applicable  Revised IFAC Code of Ethics (July 2009), effective 01/01/11, significantly strengthens the independence requirements for public interest entities (PIEs) audits, non-PIE audits and other assurance services

12. Standing for trust and integrity 12 Financial Reporting  Need to keep momentum on global standards  Impact of the financial crisis, especially on financial instruments (IAS 39 – IRFS 7)  Debate on convergence  Reform of the 4th Directive on annual accounts  Simplification debate: Member State option to exempt micro-entities  Complete Overhaul of the Directives?  Role of IFRS for SMEs?

13. Standing for trust and integrity 13 Beyond accounting and auditing  Internal Market  Recognition of professional qualifications  Taxation  C 3 TB  ECJ case law  Sustainability Trends in non financial reporting

14. Standing for trust and integrity 14 FEE Policy Statements  Financial Crisis  Reflecting on the Crisis  Matters of Specific Relevance for Statutory Auditors during the Financial Crisis  Call for Action for European SMEs  Dynamic Provisioning for Financial Instruments  Shaping a Sustainable Economy  Auditing and Assurance  International Standards on Auditing  Financial Reporting  Future Approach to Setting Global Financial Reporting Standards  Sustainability  The Contribution of the Accountancy Profession  Non-Financial Information  Cost Internalisation  Multiple-Stakeholders: The Essence of Multidisciplinary Teams  Embedding Sustainability into Corporate Governance  Carbon Emissions Information  Towards a Sustainable Economy: the contribution of Assurance

15. Standing for trust and integrity 15 Role of National Professional Bodies  National Institutes/Chambers play a key role to  Support their members and advise public authorities  Strive for equally high standards in all Member States Regulation and Oversight dot not replace professionalism and ethics  Invest in education  Ensure representativity and relevance of International Bodies such as IFAC or FEE that rely on strong local Institutes/Chambers

16. Standing for trust and integrity 16 Standing for trust and integrity Visit us @ www.fee.be