PAIB Committee Meeting Highlights
April 2009
Contacts:
Stathis Gould, stathisgould@ifac.org
Vincent Tophoff, vincenttophoff@ifac.org
The Professional Accountants in Business (PAIB) Committee met in
Hong Kong, April 22 – 24, 2008. This summary is for information
purposes only. Vincent Tophoff vincenttophoff@ifac.org
Developing International Good Practice Guidance (IGPG)
The PAIB Committee continues to give momentum to developing
International Good
Practice
Guidance
(IGPGs) as a high priority. In
Vincent
Tophoff
vincenttophoff@ifac.org
February 2009 the committee has published the IGPG, Evaluating and
Improving Governance in Organizations. So far, the publication has
been used as part of the IFAC submission to the recent G20 summit, and
at a recent OECD meeting on governance issues arising from the crisis.
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The IGPG complements
the (morevincenttophoff@ifac.org
legalistic) 2004 OECD Principles of
Corporate Governance, as it is specifically focused on what professional
accountants can/should do to evaluate and improve governance in their
organizations by balancing performance and conformance. The
committee is planning
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to Tophoff
issue a specific
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article on the synergy between
the OECD and IFAC documents.
The committee also approved a revised IGPG on Evaluating and
Improving Costing in Organizations for issuance in June. This IGPG
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vincenttophoff@ifac.org
establishes fundamental
costing principles
that will help professional
accountants in business and their organizations to evaluate and improve
their approach to providing relevant and reliable managerial information.
In the context of the Preface to International Good Practice Guidance,
which sets the purpose
IGPGs, vincenttophoff@ifac.org
the principles provide a benchmark to
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good practice in applying costing systems and methods and using
costing information.
The committee is currently also conducting exploratory work related to
preparing an IGPG
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on Tophoff
calculating
vincenttophoff@ifac.org
and using the cost of capital, to
complement its 2008 IGPG on Project Appraisal Using Discounted
Cash Flow, and considering an IGPG on evaluating and improving
internal control in organizations.
Vincent
Tophoff vincenttophoff@ifac.org
IFAC Sustainability
Framework
Perhaps the most visible of the committee’s outputs was the launch in
February of the web-based Sustainability Framework. This provides the
Vincent Tophoff vincenttophoff@ifac.org
tools for professional accountants in business to introduce and integrate
sustainability into their organization. The framework covers all the key
areas of relevance and importance to the role of PAIBs. It has links to
member body and other resources and good practice, taking users to the
most relevant and useful references.
The Sustainability Framework has had unprecedented success. In
addition to a large number of downloads, there have also been articles
promoting it in the magazines and journals of many member bodies,
including ICAEW, CIMA, CMA Canada, and AICPA. Earlier in the
year, Ian Ball met with Paul Druckman, the Chair of the Executive
Board managing the Prince of Wales Accounting for Sustainability
project, to discuss the sustainability issues and the IFAC Framework
project. This is being followed up with further discussions at an
executive and operational level to consider how IFAC and the Prince of
Wales project can collaborate and perhaps have a more coordinated
approach to supporting the accountancy profession in relation to
sustainability.
Roles, Domains and Competencies of Professional Accountants in
Business
The PAIB Committee is developing a discussion paper on what
employers expect of PAIBs in 2015, which involves better defining and
promoting the diverse roles of PAIBs, and their key differentiating
competences and skills. The Committee approved to integrate an
additional initiative to investigate the need for the development of a
comprehensive international competency framework for people
responsible for the oversight of the preparation of financial statements of
public interest entities.
Business and Financial Reporting
The PAIB Committee is actively supporting and contributing to the
Board project on business reporting, which recently published the results
of a global research study, entitled Developments in the Financial
Reporting Supply Chain—Results from a Global Study among IFAC
Member Bodies, and is currently working on a series of interviews with
investors, preparers, auditors, standard setters, and regulators from
around the globe to provide practical solutions for making business
reporting more useful and for further improving the communication (on
business performance) between a business and its stakeholders. In
addition, the PAIB Committee is also considering a response to the
IASB exposure draft on management commentary and participating in
IFAC projects on XBRL and revenue recognition.
Articles of Merit
In March, the PAIB Committee published the winners in its annual
Articles of Merit Award Program for Distinguished Contribution to the
Roles and Domain of Professional Accountants in Business. The
committee decided to also continue this program in 2009 and is
considering minor refinements to the way it is run to allow for the
exposure of a larger number of high quality articles.
The Financial Crisis
At its meeting, the PAIB Committee discussed the pivotal role of
professional accountants in business in addressing the consequences of
the current financial and economic crisis, for example in supporting their
organizations in regaining control by better understanding the risks they
face and getting their (governance) basics right. In this respect, the
committee supports the continued development of the resources relevant
to PAIBs in IFAC’s financial crisis webpage and felt that there continues
to be room to leverage the committee’s work to support IFAC’s strategic
theme, to be the international voice of the accountancy profession.
International forum for PAIBs
As part of the communications process of the governance IGPG, the
PAIB Committee has, together with the Hong Kong Institute of Certified
Public Accountants, hosted a forum in which more than 150 PAIBs from
around the globe discussed their role in upholding high standards of
governance and enhancing performance through effective risk
management and internal control policies and practices.
Date of Next Meeting
The next PAIB Committee meeting will be held on October 7-9, 2009 in
New York.