IFIAR Public Oversight – Benefits and Challenges Julia Rendschmidt, AOC (Germany)
What I will cover • What IFIAR is – Definition – Scope – Objectives – Membership • IFIAR’s organisation and structure • IFIAR’s current initiatives • IFIAR’s core principles • IFIAR’s role in high quality corporate reporting • Questions and Discussion
What IFIAR is • IFIAR = International Forum of Independent Audit Regulators • IFIAR is the international focal point for audit regulation • Formed in 2006; currently 46 Members from all continents, including 13 out of 20 G20 countries • IFIAR is equivalent to IOSCO (securities regulators), Basel Committee (banking) and IAIS (insurance)
IFIAR’s scope • Sharing knowledge of the audit market environment and practical experience of independent audit regulatory activities with a focus on inspections of auditors and audit firms • Promoting collaboration and consistency in regulatory activity • Providing a platform for dialogue with other organizations that have an interest in audit quality
IFIAR membership • Restricted to regulatory agencies that are: – Independent of the profession – Responsible for regulatory tasks and particularly systems of recurring inspection of auditors of Public Interest Entities (PIE’s), either directly or indirectly • A number of jurisdictions are in the process of applying or have enquired about membership • Organisations interested in joining should contact the IFIAR Chair via www.ifiar.org
IFIAR’s organisation and structure • Officers – Chair: Lew Ferguson, PCAOB, US – Vice-chair: Janine van Diggelen, AFM, NL • Advisory Council – advises the Officers; comprised of 7 Members • Working Groups – six Working Groups • Funding – Each Member pays ! 9,000 annually to fund IFIAR operations • The IFIAR Charter is available at www.ifiar.org
IFIAR’s organisation and structure • Official IFIAR Observers include: – International Organization of Securities Commissions (IOSCO) – Basel Committee – International Association of Insurance Supervisors (IAIS) – the World Bank – the European Commission – the Financial Stability Board (FSB) – the Public Interest Oversight Board (PIOB)
IFIAR’s organisation and structure • Annual meetings – Plenary meeting held in April • Discussions cover audit policy, market developments and members’ inspection findings • Plenary discussions with investors, standard setters and others • The Global CEO’s of the 6 major audit international networks called the Global Public Policy Committee (GPPC), attend to answer questions from IFIAR members – Interim meeting held in October
IFIAR’s organisation and structure • Annual Meetings (continued) - Inspection workshop • 90+ inspectors discuss and compare inspection procedures, experiences, approach, strategy and findings • Global event that drives consistency in regulatory approaches
IFIAR’s organisation and structure • IFIAR working groups (WG): – Global Public Policy Committee WG – Investor WG – Standards Coordination WG – International Cooperation WG – Inspection Workshop WG – Enforcement WG
IFIAR’s Core Principles • 11 Principles were established in 2011 • Principles cover Audit Regulators’ – Structure – Operations – Inspections • Principles are not binding on Members but are a good indication of Members’ best practices
IFIAR’s Core Principles • Principles on structure cover responsibilities, independence, transparency and accountability of regulators • Principles on operations cover enforcement, handling of complaints, capacity and competence of staff, confidentiality and cooperation • Principles on inspection cover risk-based, effective firm-wide reviews and the audit file review process
IFIAR’s role in promoting high quality corporate reporting • High quality audit supports high quality corporate reporting, which lowers the cost of capital, and underpins economic stability and growth • IFIAR and its members promote quality in audit on a global basis • IFIAR and its members provide feedback to audit standard setters and act as a counterbalance to the influence of the profession; IFIAR is a member of the Monitoring Group • Independent oversight of the profession is increasingly a condition of continued public trust in the accounting and audit professions
IFIAR’s current initiatives • Survey of Members’ inspections findings and international cooperation matters • Continuous sharing of best practice in inspections and enforcement matters • Increase public visibility by aiming to develop common views on audit standards • Dialogue with investors, GPPC, IAASB and IESBA • Examination of governance structures and business models of audit networks and their influence on audit quality • Outreach effort to assist jurisdictions to establish sound auditor oversight systems
Questions and discussion Over to you! www.ifiar.org
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