Meeting Venue Date 2017-2019 PIOB STRATEGY PUBLIC CONSULTATION PAPER Chuck Horstmann IESBA September 26-30 2016 Meeting

Meeting Venue Date On August 26th , the PIOB published for public comments its 2017-2019 Strategy Consultation Paper: http://www.ipiob.org/media/files/attach/PIOB_2017-19_strategy.pdf The Paper is open for comments until November 26th.

Future Challenges in Oversight 1. The goal of the PIOB is to ensure the public interest responsiveness of the standards developed under its oversight. The PIOB identifies 4 areas of future challenges: Responding to the public interest is becoming more demanding as the involvement of stakeholders increases. Increased expectations on what audit firms should deliver in terms of higher quality and transparency of the audit, and on the professional behavior of auditors. Increased need to understand better the contribution of the accounting profession to increase confidence in financial markets and improve the stability of the financial system. How best to encourage the process of effective implementation of standards globally in order to improve audit quality in global financial markets. 2. In the PIOB’s assessment of the current standard setting system, there is room for structural improvements to enhance the independence of the SSBs and their responsiveness to stakeholders. 3

Threats to the Public Interest 1. The Strategy discusses structural considerations that may enhance the responsiveness of the SSBs to public interest threats. Are all relevant stakeholders represented in the SSBs? Is further representation of some stakeholders needed, in particular, from the investor and regulatory communities? A majority of SSB members are related to the accounting profession. Independence of the Nominating Committee from IFAC in the process of selecting nominations to the SSBs: IFAC’s Nominating Committee is chaired by IFAC’s President. The definition of the category of Public Members overlaps with that of non-practitioners, so categorization of members can be unclear. The introduction of a remuneration scheme for Public Members could help enhance the ability to attract candidates. 2. The Terms of Reference of the SSBs under PIOB oversight were last reviewed in 2011, so a new review is needed that could contemplate discussing these issues, as is the case with the ToR of the Nominating Committee of IFAC. 3. The PIOB also intends to develop a more structured process for approval of nominations to SSBs vacancies, including the Chairs, and to the Nominating Committee of IFAC to help contribute to a more balanced representation in SSBs. 4

PIOB vision 1. The strategy discusses the role of the PIOB in education for accountants and standard adoption and implementation, 2. The strategy discusses the PIOB’s views on the longer term evolution of the standard setting system, which include: Guarantee the stability of the PIOB through a stable and diversified funding framework. Establish a close coordination between the MG and the PIOB. Ensure a balanced composition of the PIOB in terms of experience, gender and geography. A consultation process could be conducted ex-ante. Monitor the implementation of the governance enhancements proposed by the MG and currently under discussion with IFAC, which focus on: Achieving a more independent nomination process for the Chair and the board members of the SSBs. Achieving a more balanced, multi-stakeholder composition of the SSBs. Achieving a more balanced composition of the Task Forces. Strengthening the (perceived) independence of the PIOB by not extending IFAC’s prerogative to nominate a PIOB member. 5