The New Compliance Regime: How it Works to Strengthen the Profession Wim DE BRUIJN Chairman, IFAC Compliance Committee Netherlands

World Congress of Accountants, Hong Kong, 2002, Plenary Session 2 SUMMARY REPORT AND UPDATE By Wim de Bruijn, Chairman, IFAC Compliance Committee IFAC COMPLIANCE COMMITTEE

Ongoing Program of Work The development and presentation to the IFAC Board of : –Proposals for strategy and future program of work –Methodology –Standards, protocols and working papers for use in the compliance process

Main Objective of the Compliance Committee To ensure compliance by member bodies with the obligations of membership of IFAC

Central Obligation of Membership To subscribe to the objective of IFAC – “the worldwide development and enhancement of an accountancy profession, with harmonized standards, able to provide services of consistently high standard, in the public interest.” “the worldwide development and enhancement of an accountancy profession, with harmonized standards, able to provide services of consistently high standard, in the public interest.”

member bodies are required to work towards implementation of the standards and other pronouncements of IFAC. These include These include –International Public Sector Accounting standards –International Standards on auditing –The IFAC Code of Ethics for professional accountants

Bringing greater clarity and certainty Upgrade of guidelines and statements to standardsUpgrade of guidelines and statements to standards Statements of Membership Obligations (SMOs)Statements of Membership Obligations (SMOs)

Statements of Membership Obligations SMO 1 - Quality AssuranceSMO 1 - Quality Assurance SMO 2 - EducationSMO 2 - Education SMO 3 - AuditSMO 3 - Audit SMO 4 - EthicsSMO 4 - Ethics SMO 5 - Public SectorSMO 5 - Public Sector SMO 6 - Investigation and DisciplineSMO 6 - Investigation and Discipline SMO 7 - Structure and GovernanceSMO 7 - Structure and Governance

Statements of Membership Obligations SMO 8 – Support of work of the IASBSMO 8 – Support of work of the IASB

Proposed Methodology Self-assessment questionnairesSelf-assessment questionnaires VerificationVerification Visits to member bodies, as necessaryVisits to member bodies, as necessary

Principal Focus Public interest activities of member bodies

Objectives Gap analysis processGap analysis process Identification of level of complianceIdentification of level of compliance Identification of needsIdentification of needs Development of work programsDevelopment of work programs Higher level of complianceHigher level of compliance

The Compliance Regime applies to all member bodies. It is not all about audit

Outside Stakeholders RegulatorsRegulators International agenciesInternational agencies –Support –Influence –Resource

Value Added by Compliance Process the publicthe public member bodiesmember bodies restoring public confidence in the profession.restoring public confidence in the profession. emphasize the important role of member bodiesemphasize the important role of member bodies –in maintaining and enhancing professional standards at national level: and –the part that they play in the harmonization of standards around the world.

The Compliance Committee needs Support of all member bodiesSupport of all member bodies Input by member bodies to the processInput by member bodies to the process