1. International Federation of Accountants Implementation Support Bernard Scicluna, IFAC SMP Committee Member, Malta Institute of Accountants IFAC SMP Forum 2008 Abuja, Nigeria, October 13, 2008

2. IFAC and SMP Committee Strategic Plans 2009 - 2012 The ‘ISA Guide’ ISQC 1 The ‘QC Guide’

3. IFAC SMP Committee SMP Committee Strategic & Operational Plan 2009-2012 Purpose: “….to identify and represent the needs of the constituents and, where applicable, to give consideration to relevant issues pertaining to SMEs / SMPs.”Purpose: “….to identify and represent the needs of the constituents and, where applicable, to give consideration to relevant issues pertaining to SMEs / SMPs.” Two-pronged approach to helping SMPs (& SMEs) deal with standards overload:Two-pronged approach to helping SMPs (& SMEs) deal with standards overload: –Helping to shape form & content of international standards through direct input to standard-setting –Providing practical support to SMPs through, for example, provision of implementation materials

4. Objective - to help practitioners efficiently, effectively, and economically apply ISAs to SME auditsObjective - to help practitioners efficiently, effectively, and economically apply ISAs to SME audits –Published December 2007; Approx. 400 pages –Developed by Canadian Institute of Chartered Accountants (CICA) –IFAC quality review IFAC has full copyrightIFAC has full copyright Member bodies & others can use as is or adaptMember bodies & others can use as is or adapt –PDF downloadable free at http://www.ifac.org/Store/ –CD version available on request Provision of Implementation Support Guide to Using ISAs in the Audits of SMEs (ISA Guide)

5. Provision of Implementation Support Vision – facilitate development of range of high quality materials at reasonable cost (nil?) to end usersVision – facilitate development of range of high quality materials at reasonable cost (nil?) to end users SMPC to develop itself only in specific instancesSMPC to develop itself only in specific instances –Quality Control Guide – to help SMPs operate a QC system in compliance with ISQC 1 (Q1 2009) –IESBA Implementation Materials for SMPs – to help SMPs apply independence section of Code of Ethics (2009?)

6. IFAC Strategic Plan 2009 - 2012 IFAC Strategic Plan 2009 - 2012 Four strategic themes are: 1. Be recognized as the international setter standard in the areas of auditing and assurance, education, ethics and governmental financial reporting. 2. Actively support the adoption of, and assist in, the implementation of international standards 3. Continually enhance the relevance of the profession 4. Be the international voice of the accountancy profession

7. Non-authoritative implementation guide√Non-authoritative implementation guide√ ≠ SME audit standard Includes all ISA requirements√Includes all ISA requirements√ ≠ Substitute for ISAs IFAC SMP Committee publication√IFAC SMP Committee publication√ ≠ Approved/endorsed by IAASB Integrated case study and some practice aids√Integrated case study and some practice aids√ ≠ Full set of audit programs/forms/checklists ISA Guide Attributes

8. Derivative Products Derivative Products Training material, forms, checklists, software etc.Training material, forms, checklists, software etc. Intended to be ‘platform’ product from which derivative products can be logically developedIntended to be ‘platform’ product from which derivative products can be logically developed IFAC to facilitate development & dissemination of high quality derivatives at reasonable cost to usersIFAC to facilitate development & dissemination of high quality derivatives at reasonable cost to users

9. The ‘ISA Guide’

10. Audit Methodology - The Three Rs

11. Dephta Furniture Inc. Suraj Dephta Managing Director John Rabeer IT IT Staff (vacant) Arjan Sing Sales Sales Staff Jawab Kassab Finance Karla Winston Jawab’s Assistant Dameer Dephta Production Supervisor Production Staff Inventory Quality Control Manager Kamera Dephta Suraj’s Assistant Business started by father Son Managing Director Son Production Manager 19 staff Largely family run

12. Use of graphics, tables, consider points

13. Sample Chapter Layout

14. High demand - 14,000+ downloads since launchHigh demand - 14,000+ downloads since launch –Second most downloaded IFAC publication after the IFAC Handbook Several translations & reproductions in progress – e.g. Chinese, Spanish, Polish, Finnish, Lithuanian, Czech, RomanianSeveral translations & reproductions in progress – e.g. Chinese, Spanish, Polish, Finnish, Lithuanian, Czech, Romanian Indicates a very real need for a product such as thisIndicates a very real need for a product such as this Formal request for feedback in GuideFormal request for feedback in Guide –Too early to gauge usefulness ISA Guide – Popularity & Feedback

15. The Canadian Institute of Chartered Accountants (CICA) has developed pack of International Audit Guide checklists and forms for CAD 125 (approx. USD 125) http://www.knotia.ca/store/iagforms

16. The Institute of Chartered Accountants in Australia (ICAA) has adapted the ISA Guide & supplemented it with a toolkit of checklists and forms plus a road-show of training sessions The Institute of Chartered Accountants in Australia (ICAA) has adapted the ISA Guide & supplemented it with a toolkit of checklists and forms plus a road-show of training sessions ICAA negotiating to include as core auditing text at Australian universities ICAA negotiating to include as core auditing text at Australian universities http://www.charteredaccountants.com.au/A121542159

17. APB Practice Note 26 – Guidance on Smaller Entity Audit Documentation, Sep 07 http://apb.frcpublications.com/

18. Commitment to continuous improvementCommitment to continuous improvement –First CICA Update – Dec 2009 (including Clarity) to accompany 2010 IFAC Handbook –Second CICA Update – Dec 2010 to accompany 2011 IFAC Handbook Your own & your Institutes’ feedback would be much appreciatedYour own & your Institutes’ feedback would be much appreciated Your Feedback GUIDE TO USING INTERNATIONAL STANDARDS ON AUDITING IN THE AUDITS OF SMALL- AND MEDIUM-SIZED ENTITIES Request for Comments This is the first version of the Guide. While we consider this Guide to be of high quality and useful in its present form, like any first edition it can be improved. Hence, we are committed to updating this Guide on a regular basis so as to ensure it reflects current standards and is as useful as possible.

19. The ‘QC Guide’ ISQC 1

20. Objective – to help SMPs efficiently operate a QC system in compliance with International Standard on Quality Control (ISQC) 1 (as redrafted under Clarity project)Objective – to help SMPs efficiently operate a QC system in compliance with International Standard on Quality Control (ISQC) 1 (as redrafted under Clarity project) Publication expected Q1 2009: annual updatesPublication expected Q1 2009: annual updates Being developed by CGA-Canada with IFAC quality reviewBeing developed by CGA-Canada with IFAC quality review IFAC has full copyrightIFAC has full copyright Available for free – downloadable PDF or CD RomAvailable for free – downloadable PDF or CD Rom Member bodies & others free to use as is or adapt (permission)Member bodies & others free to use as is or adapt (permission) QC Guide Overview

21. Main chapters:Main chapters: –General Policy Statement –Leadership Responsibilities (“Tone from the Top”) –Ethical requirements –Acceptance and continuance of client relationships / engagements –Human resources –Engagement performance –Monitoring –Documentation QC Guide Table of Contents

22. Other features:Other features: –Two sample QC Manuals Sole practitionerSole practitioner 2-5 partner firm2-5 partner firm –Case study –Illustrations –Some checklists / forms QC Guide Table of Contents

23. Future Plans Guidance to MBs on how to adapt / localize and otherwise make use of guidesGuidance to MBs on how to adapt / localize and otherwise make use of guides Develop ‘train the trainer’ & other CPD materials based on core content of guidesDevelop ‘train the trainer’ & other CPD materials based on core content of guides Certification of products asserting compliance with IFAC standards/guidanceCertification of products asserting compliance with IFAC standards/guidance

24. IFAC SMP Committee Provision of Implementation Support Group A will discuss this topic further