Two standard-setting bodies have recently made moves that may speed the integration of international and national accounting and auditing standards.
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The International Public Sector Accounting Standards Board (IPSASB) has proposed a new standard to help governments and other public sector entities account for obligations under defined employee benefit plans and to recognize liabilities related to those obligations. The proposed standard would cover short-term employee benefits, post-employment benefits, other long-term employee benefits, and termination benefits.
The IPSASB, of the International Federation of Accountants (IFAC), has issued an Exposure Draft and is seeking comments on the proposal, which promotes convergence with International Financial Reporting Standards.
In addition to international public sector financial reporting standards, the IFAC, which consists of about 160 professional accountancy bodies in 120 countries, sets auditing and assurance standards through its independent International Auditing and Assurance Standards Board (IAASB).
The IAASB is tasked with establishing International Standards on Auditing (ISAs) for publicly traded companies, private business of all sizes and government entities. The World Federation of Exchanges (WFE) has formally endorsed the process the IAASB has developed for creating global standards for audit work and assurance reviews. The endorsement provides momentum for convergence to international standards.
IFAC President Graham Ward welcomed WFE’s endorsement. “It is a significant recognition of the quality of the ISAs and the important role they play in ensuring greater comparability of financial information for investors and facilitating cross-border trade — both of which are critical to generating economic growth,” he said.
The public can comment on all proposed ISAs, which are increasingly being adopted worldwide. Find project information on its website at www.iaasb.org.