With a global set of auditing standards the goal, the organization representing accountants worldwide is ready to open its doors to external oversight for the first time âpart of the industry's ongoing effort to restore its reputation after U.S. corporate scandals.
The International Federation of Accountants, which sets global best-practice auditing rules, is looking for a prominent group of regulators to head the oversight group. But the IFAC's efforts may not reach far enough for some regulators who see opportunities for conflicts of interest due to the organization's two roles â lobbyist and standards setter.
The European Commission last month protested the fact that the International Auditing and Assurance Standards Board (IAASB), which sets global auditing standards, is not under the scrutiny of external oversight.
The profession pays for the IAASB, an IFAC committee. The board's standards are best-practice benchmarks for auditing rules written by national standard-setting bodies. Governments and regulators want one set of global auditing standards to bring together U.S. and international accounting rules.
The Financial Stability Forum, a group of governments and regulators, wants the IAASB under independent, external supervision.
IFAC has requested external oversight by an accounting profession public interest review group, but has not gone so far as to put the supervisory responsibility on IAASB, according to the Financial Times.
The Times reported that the IFAC is looking for an oversight group made up of representatives from the Basel committee on banking reform, the European Commission, the Financial Stability Forum, the International Monetary Fund and the World Bank. IFAC officials would make up a minority.
"The primary objective of the group would be to identify, and to seek ways to address, areas in which accounting and auditing can contribute more effectively to the operation of the international economic and financial systems," IFAC wrote and The Times reported.