1. Page 1 | Confidential and Proprietary Information IFAC and International Standard Setting – UPDATE

2. Page 2 | Confidential and Proprietary Information Currently being developed, taking account of Strategy Review Survey –INTOSAI response –Board approval in September; Council approval in November Proposals include the establishment of an International Standards Setting Forum –Membership: international standard setters and those affected by international standards –Objective: To discuss critical issues requiring action and intervention, including governance, due process, and adoption and implementation IFAC Strategy for 2016-2018

3. Page 3 | Confidential and Proprietary Information Supported by 82.6% of survey respondents; however, detailed comments … –Questioned membership and objective –Strongly cautioned against duplication of efforts (e.g., Consultative Advisory Groups) Planning and Finance Committee expressed mixed support and suggested … –Modifying action to “explore whether to establish” a forum –Clearly articulating the forum’s membership and objective before deciding whether it should be established International Standard Setting Forum

4. Page 4 | Confidential and Proprietary Information Professional Accountancy Organization (PAO) Capacity Building Program –Includes building capacity of public sector accountants and auditors Capacity Building

5. Page 5 | Confidential and Proprietary Information International Framework: Good Governance in the Public Sector Good Governance in the Public Sector

6. Page 6 | Confidential and Proprietary Information Accrual reporting is the benchmark Increasing IPSAS adoption Accrual budgeting gains support Financial management still weak Integrated reporting on the horizon Public Sector Financial Reporting—Current Situation  Austria  Russia  Brazil  Slovakia  Chile  South Africa  Columbia  Spain  Costa Rica  Switzerland  Estonia  Thailand  Indonesia  European Commission (for their own financial statements)  Kenya  North Atlantic Treaty Organization (NATO)  New Zealand  Organisation for Economic Co- operation and Development (OECD)  Panama  United Nations System  Peru Government debt fears spook global markets IMF: “IPSAS are the only international standards designed for the public sector” January, 2014

7. Page 7 | Confidential and Proprietary Information Transparency and Accountability in the Public Sector Accountability. Now. –Campaign –Coalition (INTOSAI invited to join) –Workshops –Capacity building

8. Page 8 | Proprietary and Copyrighted Information International Public Sector Accounting Standards Board (IPSASB) OUTPUTS High-quality financial reporting standards and other publications for the public sector Outreach and stakeholder engagement to raise awareness, acceptance and adoption OUTCOME That decision-making and accountability of public sector entities are improved and global fiscal stability and sustainability are enhanced by credible and transparent financial reporting that results from the adoption of accrual- based IPSASs Strengthening public financial management and knowledge globally through increasing adoption of accrual-based IPSASs

9. Page 9 | Proprietary and Copyrighted Information Strategic Emphasis Converge with IFRS Maintain Existing IPSASs Other Projects Public Sector Specific

10. Page 10 | Proprietary and Copyrighted Information Priorities Social Benefits * Non-Exchange Expenses Heritage Assets / Infrastructure Assets Revenues – Exchange and Non-Exchange Maintain Existing IPSASs Measurement Emissions Trading Schemes * Financial Instruments * Public Sector Combinations * Employee Benefits IPSAS 25 * Leases Cash Basis IPSAS Public Sector Specific

11. Page 11 | Proprietary and Copyrighted Information Influences and Factors Coordination with Government Finance Statistics (GFS) and IFRS -Alignment where appropriate European Public Sector Accounting Standards (EPSAS) -Monitoring developments Stakeholder Outreach -Benefits of accrual-based IPSAS -Transition from cash/modified cash-basis to accrual basis

12. Page 12 | Proprietary and Copyrighted Information "A Closer Look at:" series Implementation resources –IPSAS 33, First-time Adoption of Accrual Basis IPSAS –Importance of Accrual-Based Financial Reporting in the Public Sector –Study 14—Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities (Third Edition) Introduction to IPSAS Train-the-trainer IPSAS and Accrual Accounting News IPSASB—Implementation Support

13. Page 13 International Auditing and Assurance Standards Board (IAASB) Key projects finalized –Auditor Reporting New Key Audit Matters section; revised modifications to opinions; enhanced reporting on going concern –ISA 720 – Other Information Enhanced work effort and reporting –Disclosures (subject to PIOB approval) Greater emphasis on disclosures through strengthened requirements and enhanced application material; in particular in relation to qualitative disclosures

14. Page 14 IAASB-supported “roll-out plan” with objectives of –Promoting awareness –Informing and educating users –Learning about experiences of those responsible for adopting and implementing the standards –Preparing for post-implementation review Planned activities –Outreach and other communications –Auditor Reporting Toolkit Auditor Reporting - Implementation Support New and revised Auditor Reporting standards are effective for periods ending on or after December 15, 2016

15. Page 15 Available now –Auditor Reporting Fact Sheet –Basis for Conclusions –“At a Glance” publication –Publications on GC and KAM –Slide Presentation –Illustrative KAM examples –National Publications Coming soon −Listings & extracts of illustrative reports −Webcast and podcasts Auditor Reporting Resources & Toolkit

16. Page 16 New and Forward IAASB Initiatives Review of Quality Control Standards –ISA 220 & ISQC 1 Group Audits Professional Skepticism Financial Institutions –Including accounting estimates and fair values (ISA 540) Monitoring developments in Integrated Reporting and Data Analytics

17. Page 17 | Proprietary and Copyrighted Information International Ethics Standards Board for Accountants (IESBA) – Priority Projects Responding to non-compliance with laws and regulations –Re-ED issued May 2015; new response framework proposed –Comments requested by Sept 4, 2015 Improving structure of IESBA Code –Enhancing usability to facilitate adoption and implementation –ED approval anticipated Dec 2015 Review of safeguards in the Code –Clarity, appropriateness and effectiveness of safeguards –ED approval anticipated Dec 2015 IESBA supportive of ISSAI 30 initiative