1. International Federation of Accountants Organizational Overview and Update April 2002

2. IFAC Mission IFAC’s mission is the worldwide development and enhancement of the profession with harmonized standards to enable it to provide services of consistently high quality in the public interest. IFAC Overview IFAC Overview

3. IFAC Today IFAC currently has 156 member bodies in 114 countries, representing more than 2.5 million accountants. IFAC Overview IFAC Overview

4. Current Environment The current and anticipated environment demands that the international profession: Respond to globalizationRespond to globalization Address investor and regulator needsAddress investor and regulator needs Meet expanding needs of businessMeet expanding needs of business Rebuild public confidence in the accountancy professionRebuild public confidence in the accountancy profession IFAC Overview IFAC Overview

5. Current Action Plan Strengthening activities in five key areas: Standard Setting and GuidanceStandard Setting and Guidance Regulation of the ProfessionRegulation of the Profession Development of the ProfessionDevelopment of the Profession Meeting Needs of AccountantsMeeting Needs of Accountants CommunicationsCommunications IFAC Overview IFAC Overview

6. New International Auditing and Assurance Standards Board (IAASB ) Comprised of 10 member body representatives, 5 from FoF and 3 public membersComprised of 10 member body representatives, 5 from FoF and 3 public members Strengthen internal technical resourcesStrengthen internal technical resources Develop high-quality auditing standardsDevelop high-quality auditing standards Increase transparency in auditing-standard setting processIncrease transparency in auditing-standard setting process Obtain endorsement of ISAs from IOSCOObtain endorsement of ISAs from IOSCO Standard Setting and Guidance

7. Code of Ethics for Professional Accountants Serves as a benchmark for codes of conduct of accountants worldwideServes as a benchmark for codes of conduct of accountants worldwide Approved stronger independence rules last NovemberApproved stronger independence rules last November - Conceptual framework approach (not prescriptive) - Conceptual framework approach (not prescriptive) - Highlight factors that pose threat to independence - Highlight factors that pose threat to independence - Focus on safeguards to minimize threat - Focus on safeguards to minimize threat Standard Setting and Guidance

8. Public Sector Accounting Standards (IPSAC) First authoritative international financial reporting standards for public sector (OECD, World Bank, etc.)First authoritative international financial reporting standards for public sector (OECD, World Bank, etc.) Designed to strengthen financial reporting and accountability of public sectorDesigned to strengthen financial reporting and accountability of public sector 17 standards issued to date17 standards issued to date Standard Setting and Guidance

9. Education Standards Action initiated to elevate education “guidelines” to “standards”Action initiated to elevate education “guidelines” to “standards” “Standards” designed to promote compliance (not only consideration)“Standards” designed to promote compliance (not only consideration) Address pre- and post-qualification education requirements and emerging topics such as ITAddress pre- and post-qualification education requirements and emerging topics such as IT New standards to be exposed for comment in June; Final issuance December 2002New standards to be exposed for comment in June; Final issuance December 2002 Standard Setting and Guidance

10. Current Action Plan Strengthening activities in five key areas: Standard Setting and GuidanceStandard Setting and Guidance Regulation of the ProfessionRegulation of the Profession Development of the ProfessionDevelopment of the Profession Meeting Needs of AccountantsMeeting Needs of Accountants CommunicationsCommunications IFAC Overview IFAC Overview

11. Regulatory Initiatives Regulatory regime comprised of 4 primary bodies Forum of Firms (FoF)Forum of Firms (FoF) Transnational Auditors Committee (TAC)Transnational Auditors Committee (TAC) Compliance CommitteeCompliance Committee Independent Oversight BoardIndependent Oversight Board Regulation of the Profession Regulation of the Profession

12. Forum of Firms Objective To promote consistently high standards of financial reporting and auditing worldwide in the interest of the usersTo promote consistently high standards of financial reporting and auditing worldwide in the interest of the users Regulation of the Profession

13. Forum of Firms FoF members will work to achieve this objective by: Comply with FoF Quality StandardComply with FoF Quality Standard Subject policies, methodologies, and work to periodic external quality assurance reviewSubject policies, methodologies, and work to periodic external quality assurance review Promote use of international auditing and assurance standardsPromote use of international auditing and assurance standards Involve in IFAC activitiesInvolve in IFAC activities Regulation of the Profession

14. Transnational Auditors Committee (TAC) IFAC Committee and executive arm of FOFIFAC Committee and executive arm of FOF Responsibilities include:Responsibilities include: - Connect FoF and IFAC Board - Connect FoF and IFAC Board - Develop, maintain and administer the - Develop, maintain and administer the Quality Assurance Review program Quality Assurance Review program - Develop guidance regarding transnational audits - Develop guidance regarding transnational audits Regulation of the Profession

15. Compliance Committee Objective Encourage improvement and enhancement of standards within IFAC member bodies through greater compliance with standards, rules and guidelines issued by IFAC Regulation of the Profession

16. Compliance Committee Responsibilities include: Evaluate potential member applications for Board considerationEvaluate potential member applications for Board consideration Review member bodies’ harmonization of IFAC pronouncements with local rulesReview member bodies’ harmonization of IFAC pronouncements with local rules Help member bodies comply with IFAC requirementsHelp member bodies comply with IFAC requirements Work closely with TAC to monitor FoF memberWork closely with TAC to monitor FoF member Regulation of the Profession

17. Independent Oversight Board Preserve and strengthen public confidence in financial reporting and the integrity of the audit processPreserve and strengthen public confidence in financial reporting and the integrity of the audit process Review FoF quality control process and IFAC activitiesReview FoF quality control process and IFAC activities Draft charter was exposed for commentDraft charter was exposed for comment Revisit framework in light of recent environmental changes.Revisit framework in light of recent environmental changes. Regulation of the Profession Regulation of the Profession

18. Current Action Plan Strengthening activities in five key areas: Standard Setting and GuidanceStandard Setting and Guidance Regulation of the ProfessionRegulation of the Profession Development of the ProfessionDevelopment of the Profession Meeting Needs of AccountantsMeeting Needs of Accountants CommunicationsCommunications IFAC Overview IFAC Overview

19. International Forum on Accountancy Development (IFAD) IFAD was created in 1999 to improve financial reporting, auditing practice and corporate governanceIFAD was created in 1999 to improve financial reporting, auditing practice and corporate governance Currently comprised of over 30 public and private institutionsCurrently comprised of over 30 public and private institutions Developing and implementing country action plansDeveloping and implementing country action plans Development of the Profession

20. Meeting the Needs of a Diverse Profession SMP Task Force established to address needs of Small and Medium-Sized PracticesSMP Task Force established to address needs of Small and Medium-Sized Practices Working group established to focus on meeting the needs of accountants in business, industry and commerceWorking group established to focus on meeting the needs of accountants in business, industry and commerce IFAC’s web site provides a wide range of mostly free guidance for the world’s accountantsIFAC’s web site provides a wide range of mostly free guidance for the world’s accountants Support for Accountants Support for Accountants

21. Responding to Public Concern Establishing international task force to study and recommend principles of best practice in the areas of …… Financial and business reportingFinancial and business reporting Corporate governanceCorporate governance Auditor performanceAuditor performance Interim report expected in November 2002Interim report expected in November 2002 Final report to be issued in March 2003 Final report to be issued in March 2003 Communications Communications

22. Increased Spokesmanship Represent the profession to international bodiesRepresent the profession to international bodies Express profession’s view to IOSCO and other international institutionsExpress profession’s view to IOSCO and other international institutions Explain the profession’s role with respect to public interest and other responsibilitiesExplain the profession’s role with respect to public interest and other responsibilities Communications Communications

23. Current Action Plan Strengthening Standard Setting and GuidanceStandard Setting and Guidance Regulation of the ProfessionRegulation of the Profession Development of the ProfessionDevelopment of the Profession Meeting Needs of AccountantsMeeting Needs of Accountants CommunicationsCommunications IFAC Summary IFAC Summary

24. International Federation of Accountants