But IFAC has also come in for criticism. Sceptics claimed IFAC ‘lacks teeth’.
In response, IFAC is introducing a new compliance and regulatory regime to bolster the profession’s self-regulatory capacity and strengthen the global financial framework in which the profession operates.
Pressure from regulators has been a major force in developing the ‘new look’ IFAC. To protect cross-border capital movements, regulators have focussed on the need for increased consistency, transparency and comparability of financial information.
Although the profession cannot be blamed if national regulation is inadequate, accountants and auditors have still come under the regulators’ spotlight. Questions have been raised about quality and consistency. The US SEC has expressed doubts about the ability of the profession to regulate itself and advocated an international regime.
We have therefore launched a two-prong assault to encourage compliance.
Firms that carry out transnational audit work will be eligible for membership of the new IFAC forum of firms. Membership obligations include compliance with international standards and the IFAC ethical code, plus quality reviews.
An IFAC compliance committee has also been created to work closely with those responsible for practice review within the FOF and to monitor and encourage compliance with international initiatives.
On the broader scene, IFAC is working with regulators, international agencies and others in a drive to encourage national governments to introduce the controls that make for good governance.
The International Forum on Accountancy Development (IFAD), launched by these various interested parties last year, will strengthen accounting capacity and capability at the national level and build a platform for a strong global financial architecture.
- Tsuguoki Fujinuma is president of IFAC, a senior auditor and national council member of Century Ota.
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