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In FEE's opinion, IFAC governance, due process, monitoring and oversight are already highly developed and, as stated in the Monitoring Group Consultation Paper, the recommendations made in 2003 and in 2010 have been eagerly and satisfactorily implemented by IFAC and its independent Boards.
The establishment of high quality standards and practices in auditing and assurance, ethics and education has until now been achieved by the work of IFAC independent Boards as accommodated by the IFAC governance, funding and other mechanisms, thus balancing public interest considerations with the necessary technical expertise. FEE strongly believes this continues to be a successful formula for auditing, assurance, ethics, education and public sector accounting standard-setting for the future. For instance, the adoption of the clarified ISAs of March 2009 by over 100 legislators, regulators, supervisors and others around the globe is the ultimate confirmation that the objective of setting high quality standards is achieved.
FEE however supports the performance of an assessment of the effectiveness of the 2010 IFAC governance reforms by the Monitoring Group and the PIOB as FEE is open-minded to further enhancements by bringing more public interest considerations into the monitoring and oversight of the activities of IFAC and its independent Boards. This could include further enhancements of the role of the PIOB and in leading the discussions on further IFAC Reforms.
The Monitoring Group should take into account the fact that improvements usually have a one-off and/or recurring financial and/or resource implications. The budget of IFAC for its independent Boards, the Consultative Advisory Groups and the PIOB is limited and while some re-allocations and further efficiencies might be possible, there appears to be little opportunity for further increases if the sources of funding remain the same. Therefore, it is crucial to perform a thorough research of alternative funding sources and a cost/benefit analysis before embarking on any further enhancements of IFAC and its independent Boards. Any recommendations the Monitoring Group may have in this respect would be highly welcomed.
FEE believes that it is not only important to enhance further the governance, monitoring and oversight of IFAC and its PIACs, but it is even more crucial that the establishment and functioning of this governance structure as well as its rigour and independence is communicated clearly and widely. It is not uncommon to hear criticism on IFAC, the PIACs and their resulting standards from a governance point of view, often uninformed and unfounded, which more and better communication could counter.
In this respect, enhanced transparency on the performance of the oversight functions by the PIOB would be very helpful as well. More timely disclosure of the agenda and minutes of its meetings, including an indication of the discussions held, issues encountered, possible differences of opinion concerning the PIAC’s execution of due process, resolution of issues and differences of opinion, could be useful to avoid the impression the PIOB might be a body without any real impact.