PracticeAuditIFAC to restore respect

IFAC to restore respect

A new global committee is due to be set up with the aim of restoring credibility in financial reporting as the fallout from Enron continues.

The seven-person group to be established by the International Federation of Accountants will look at what needs to be done on an international basis to restore faith in the profession.

‘It will make recommendations using the principles-based approach to be used as best practice on financial reporting, corporate governance and audit performance. It will also take into account the work done by audit committees,’ said Graham Ward, the UK IFAC representative. ‘It’s very clear it’s principles and not rules,’ he added.

The seven-person committee will include an audit committee chairperson, a chief executive officer, an investor, a company board member, an expert in ethics and an auditor.

Aggressive earnings management, more commonly known as manipulation of accounts, will also be reviewed by the new global committee.

The new board will be expected to make its first report on its progress at the IFAC congress in November.

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