INTHEBLACK December 2020 - Magazine - Page 28
F E AT U R E
// A U D I T A N D E T H I C S S TA N D A R D - S E T T I N G
AT A G L A N C E
STORY GARY ANDERS
THE RESET ON
A F T E R F I V E Y E A R S O F C O N S U LTAT I O N W I T H R E G U L AT O R S , S TA N D A R D - S E T T I N G G R O U P S A N D
O T H E R K E Y S TA K E H O L D E R S W O R L D W I D E , T H E M O N I T O R I N G G R O U P O F I N T E R N AT I O N A L F I N A N C I A L
R E G U L AT O R S H AS R E L E AS E D I T S WAY F O R WA R D F O R R E V I S I N G T H E G O V E R N A N C E S T R U C T U R E
F O R S E T T I N G S TA N D A R D S I N A U D I T A N D E T H I C S .
28 ITB December 2020
The Monitoring Group
organisations and financial
regulators has proposed a
new governance structure
for global standard-setting
in audit and ethics to
further the public interest
and improve audit quality.
The reforms are intended
to limit the perceived
influence of any one key
stakeholder, including the
accounting profession, in
audit and ethics standardsetting, by establishing
that exist legally outside
of IFAC, and by having
a more clearly specified
membership of the boards.
The source of long-term,
sustainable, multistakeholder funding for the
new model, to pay board
members and increase staff
numbers, is not part of the
Monitoring Group proposals
and remains unresolved.
he Monitoring Group comprising international organisations and
financial regulators did not pull any punches in July, when it unveiled
its blueprints to rebuild the governance structure behind the global
setting of audit and ethics standards. In its role of advancing public
interest in international audit standard-setting and audit quality, the body
framed a series of recommendations that, it stated, would significantly change
the status quo.
The Strengthening the International Audit and Ethics Standard-Setting
System report followed five years of extensive outreach and detailed
discussions with regulators, audit and ethics standard-setting groups and other
key stakeholders around the world, with almost 200 submissions being lodged
by a range of stakeholders, including CPA Australia.
“The future structure, governance and process of standard-setting and
funding goals of the international audit and ethics standard-setting system
as outlined in the recommendations represent significant enhancements to
the current structure,” the Monitoring Group noted.
“These key enhancements to the current structure will strengthen the
standard-setting process, which should result in standards that are more
responsive to the public interest and in turn lead to improved audit quality.”
The Monitoring Group’s key recommendations have the principal objective
of achieving the following:
• an independent and inclusive multi-stakeholder standard-setting system
• reinforcing the consideration of the public interest within the standardsetting process and throughout the full cycle of the standards’ development,
with enhanced independent oversight and standard-setting guided by the
Public Interest Framework
• fostering the development of timely, high-quality standards that respond to
an accelerating pace of change
The report includes recommendations aimed at improving the process
by which global audit, assurance and ethics standards for the accounting
profession are developed and issued in the public interest.
These include proposed changes to the existing structure, governance,
processes of standard-setting and potential funding of the international audit
and ethics standard-setting system.
Among other things, the Monitoring Group has focused its perceived
need for reform of the role that the accounting profession plays, through the
International Federation of Accountants (IFAC), in funding and supporting
standard-setting boards and board nominations.
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