February 09, 2018
International standards for auditing and ethics play a critical role in the global financial infrastructure, assisting in promoting economic stability and international consistency, and in doing so, enhancing international financial and capital flows essential to a thriving global economy. This is especially important for emerging economies.
International standard setting for auditing and ethics, as recognized by an overwhelming majority of stakeholders, has been an outstanding success. More than 120 jurisdictions have adopted and use the standards, utilizing jurisdiction-specific adoption mechanisms often enshrined in legislation. These standards are used for audits of small- and medium-sized entities and private non-listed companies, and form the basis of standards used for audits of public sector entities. This is a testament to their outstanding quality and success.
Because of its clear commitment to international standards and their role in a stronger global economy, IFAC recognizes that in an ever-changing world, shaped by new technologies, growing regionalism and nationalism, and where the benefits of globalization are being questioned, even the most significant international success should be examined and reassessed. IFAC supports periodic reviews of the standard-setting model—every five years, as proposed when the current model was established—to ensure its ongoing efficiency, effectiveness, and readiness for the future. It is of the view that such reviews should be undertaken in the global public interest in a thoughtful and considered manner that is based on strong evidence and analysis, and is alert to unintended consequences that could damage the credibility and legitimacy of international standard setting.
IFAC is of the view that the Monitoring Group must engage in broad-based, open and collaborative dialogue with the key stakeholders—beyond the information session and roundtables already conducted—to discuss critical issues not addressed in this initial consultation, and which need to be considered holistically, in order to arrive at an agreed set of proposals that can be publicly consulted, and which have the broad support of all the key stakeholders.
IFAC is confident that frank and forthright collective discussions and engagement by the Monitoring Group, with IFAC, international audit firm networks, and international and regional stakeholders, will be able to reach agreement on these matters.
IFAC looks forward to collectively engaging with the Monitoring Group and other key stakeholders to continue this important dialogue and arrive at the best public interest outcome for the global economy.