International Federation of Accountants IFAC Member Body Compliance Program Update Szymon Radziszewicz Senior Technical Manager, Compliance Program IAASB Meeting New York March 18, 2010

Compliance Program Background Where we are today Where are we heading – –Challenges & Success Factors – –Basis of ISA Adoption Chart – –SMO Revisions Map for Today

Framework for Professional Accountancy Body 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)

Benchmarking and Strategy Part 1 – Self-assessment: Overview of regulatory and standard-setting framework in a member’s jurisdictionPart 1 – Self-assessment: Overview of regulatory and standard-setting framework in a member’s jurisdiction Part 2 – Self-assessment: benchmarking against the 7 SMOsPart 2 – Self-assessment: benchmarking against the 7 SMOs Part 3 – Own Strategy: Action Plans for continuous improvementPart 3 – Own Strategy: Action Plans for continuous improvement Assessing Compliance

Sneak Peak into the Future Information Gathering Questionnaire Strategy for Ongoing SMO Compliance Monitoring Enforcement Compliance Program 201X

Status in Numbers 81 – Published Action Plans 36 – Drafts received and under review 39 – In progress but no submitted draft 2 – Suspensions 1 – Expulsion Recommendation Status of Preparation of Action Plans as of March 17, 2010

Status in Pictures – Beginning of the Road

Soft updates –Done 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

26 completed as of March 17, 2010 –Overall member bodies generally remain on track –Some delay caused by changes in regulatory environment or change in priorities –Also noted a number of positive developments Annual progress reports –Include submission of updated Action Plans –11 completed or actively in progress Monitoring of Published Action Plans

Challenges Member bodies operating in developing countries generally do not have the financial and technical means to achieve all desired actions Adoption of international standards and practices is relatively easy; successful implementation can be extremely difficult The basis of adoption of international standards can have an impact on the quality of implementation. Overriding Lessons Learned

Key to Achieve Desired Actions 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 Need for Financial and Technical Resources

Developments 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 ( )

Thank you March 2010