PracticeAuditIFAC to restore profession’s credibility

IFAC to restore profession's credibility

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 credibility 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, and expert in ethics and an auditor.

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

Meanwhile, IFAC has unveiled a revamped international auditing standards board with the aim of developing audit rules to be used in cross border listings.

The IAASB as it is known includes practising accountants, academics and representatives of the business community and the public sector.

Ian Plaistowe, chairman of the UK Auditing Practices Board and a partner in Andersen, and John Kellas, partner in KPMG, are two of the 18 board members.

Aki Fujinuma, IFAC president, said: ‘The technical range and experience of these members and their knowledge of the marketplace’s needs and concerns will help to ensure that the IAASB functions efficiently and operates with the public interest in mind.’

An IAASB website – www.iaasb.org – will soon be online. The board will hold its first public meeting on 15 June in Mexico City.

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