SSB Governance Matters James Gunn Managing Director, Professional Standards IAASB IAESB IESBA IPSASB

INTOSAI Common Forum “Informal” SSB Governance Architecture Standards Setting Framework IAASB Structures & Infrastructure Strategy: Prioritizing, Trade- offs and Tensions IAASB Process – Challenges and Lesson Learned IAASB Modus Operandi Membership Matters

AuditEthicsEducation IPSASB Authoritative Standards ISQC, ISA, ISAE, ISRE, ISRS CodeIESIPSAS Non-Authoritative Guidance IPNIEPSRPG FrameworksFramework OtherStaff Publications Standard Setting Framework

Requirements -Necessary to achieve objective / absence may adversely affect quality -Applicable in virtually all engagements where standard is relevant -Proportionate to the importance of subject matter in relation to the overall engagement Requirements -Necessary to achieve objective / absence may adversely affect quality -Applicable in virtually all engagements where standard is relevant -Proportionate to the importance of subject matter in relation to the overall engagement Application Material -Background information & explanation -Explain more precisely what a requirement means or is intended to cover -Examples of procedures to consider Application Material -Background information & explanation -Explain more precisely what a requirement means or is intended to cover -Examples of procedures to consider Non-Authoritative GUIDANCE -Educational and practical assistance in applying Standard(s) in relation to a specific topic, industry or development -Does not impose additional obligations (explicitly or implicitly) -Material not essential to a proper understanding of a standard(s) in international context -Not used to address a required change in behavior Non-Authoritative GUIDANCE -Educational and practical assistance in applying Standard(s) in relation to a specific topic, industry or development -Does not impose additional obligations (explicitly or implicitly) -Material not essential to a proper understanding of a standard(s) in international context -Not used to address a required change in behavior STANDARDS

Standards Development Thought Leadership Evidence / Issues Exploration Standards Writing Engagemen t Clarifying Guidance & Support Materials Post- Implement Review SSB STRATEGIC OUTREACH & COMMUNICATIONS

STANDARDS DEVELOPMENT ADOPTION & IMPLEMENTATION SUPPORT (IFAC Capacity building, Compliance, Awareness, A&I Toolkits, Training, etc.) SSB STRATEGIC OUTREACH & COMMUNICATIONS IFAC STRATEGIC OUTREACH & COMMUNICATIONS Thought- leadership Evidence / Issues Exploration Guidance & Impl’n Material Standards Writing Post- Implement Review

Independent Public Interest Oversight Remunerated independent Chairs Volunteer Board members - Annual Call for Nominations Due process Consultative Advisory Groups (All projects discussed at each key stage) Task Forces – Composition: Balanced, typically a subset of broader Board composition + experts Standard Setting Structures

Task Force and Working Group Compositions Task ForceChairPublic Members (PM) Non- Practitioner (N-P) Practitio ner (P) Others (External experts, TAs, NSS) Public & Non- Practitioner / Practitioner IAASB-IESBA-IAESB SkepticismN-P2350 / 50 IAASB ISA 540PM+P225 (regulators=3 P=2) 55 / 45 NOCLAR amendments P22 (N-P,P) 60 / 40 Group AuditsP24 (NSS=3, regulator=1) 60 / 40 Quality ControlP126 (NSS=2, regulator =2, P=2) 50 / 50 Data AnalyticsP13 (NSS=1, P=2) 20 / 80* IRPM2 3 (NSS=1, P=2) 67 / 33 Auditor Report - KAM P12160 / 40

Figures exclude financial, administrative and related resources for IFAC Support Services – Human Resources, IT, Communications, Finance & Administration, Intellectual Property, Facilities Resources Direct Operating Costs (000’s)IAASBIESBA Chairman, Staff and Consultants3,5002,100 Outreach Travel – Chair, Member and Staff Meeting Costs and Travel – Task Forces, Board, CAG Other ,0003,000 FTE – Technical / Admin9.5 / / 1.5

PIOB assessment of completeness and appropriateness IAASB Strategy and Work Plan 5-year Strategy, with mid-term assessment Rolling 2-year Work Plan PIOB assessment CAG input Public consultation Stakeholder survey, post-implementation reviews, etc.,

Need for and relevance of change to enhance engagement quality on a widespread-basis internationally and enhance public confidence Urgency in the public interest, and implications if action is delayed Degree to which an identified issue would be addressed effectively through change to the standards, through other appropriate action by the IAASB, or more effectively by others Ability to develop a standard capable of international application Global applicability -- for example in relation to entities of different sizes and complexity, different industries, and across jurisdictions Prioritizing

Scope of efforts Relevancy Strategic Trade-offs and Tensions

Other Learnings… Outreach

“ Are we operating in most efficient and effective way? Spending the right amount of effort on the right things?” Pre-project Working Groups and consultations; well-researched and clearly-scoped projects benefit work effort over the life of a project Pre-scheduled quarterly Board teleconferences Greater involvement of subject-matter experts (Plenary & TF levels) Guidance document for TFs Proportionate process for non-Standards documents -- Consider “negative clearance”, need for exposure, level of involvement/discipline regarding fatal flaw reviews, etc. Post-mortem reviews Modus Operandi “Lessons learned”

Volunteer Performance Program Attendance ContributionCollaboration Communication Commitment to Public Interest Leadership