Public Company Accounting Oversight Board member Lewis Ferguson has been elected chair of the International Forum of Independent Audit Regulators.
Ferguson was elected to chair IFIAR during a meeting of the organization earlier this month in the Netherlands.
As chair, he will serve a two-year term that will expire in April 2015. Since March 2012, he has served as vice-chair of the organization. Janine van Diggelen, head of audit firm oversight at the Netherlands Authority for the Financial Markets, was elected vice-chair for a two-year term at the IFIAR plenary meeting.
The group enables the PCAOB to share its experience and knowledge with audit regulators in other countries. Ferguson told Accounting Today he hopes to expand IFIAR’s mission and visibility during his term.
“It really is the only international audit regulatory body, and we’d like to increase its visibility," he said in a phone interview Tuesday. "It’s independent of the accounting profession, so in order for a regulator to be a member of IFIAR, your board cannot be controlled by the auditing profession.”
Among the items on his to-do list are expanding an initiative in which IFIAR has begun to collect data from audit inspectors around the world on their inspection findings. “That is something we want to continue to do, and on an annual basis or a periodic basis publish some of the results of worldwide inspection reports,” said Ferguson.
IFIAR is also starting an enforcement division that will exchange information about audit enforcement matters. “We want to begin to coordinate the kind of findings that IFIAR members are having in their inspections of auditing firms, with the internal inspections of the big audit networks, so we can begin to see if we as regulators are seeing the same things the firms themselves are seeing, and if not, do we need change or do they need to begin to change the measures and metrics they use so that we can begin to get some common ground between accounting firms and regulators,” said Ferguson.
IFIAR also does an annual inspections workshop every year in which the organization trains inspectors from around the world. “This is a very important part of our mission because it sort of sends the gospel of IFIAR out into the world and teaches people how to do regulatory work,” said Ferguson. “We want to increase our outreach to countries that do not yet meet the criteria to be members of IFIAR, but who we want to encourage to set up or more fully develop independent audit regulation.”
Among the countries where he would like to establish a presence for IFIAR are China, India and Saudi Arabia. India and Saudi Arabia have both expressed interest in joining IFIAR but do not yet have independent audit regulators.
Another initiative is increasing audit committee outreach and developing audit quality indicators on a global basis as well as potentially some international best practices. “It’s an ambitious agenda, but these are the things that we would like to begin to do at least,” said Ferguson.
IFIAR includes 46 independent audit regulators from around the world, and the group agreed to a work plan for Ferguson’s term as chairman along with charter revisions designed, in part, to facilitate IFIAR’s role as a global leader in audit quality through comments on standards and through interaction with international organizations.
The work plan emphasizes IFIAR’s thought leadership and a plan to focus on an examination of measures of audit quality, and of how the governance structures and business models of large auditing networks contribute to, or detract from, audit quality. The two-year plan and charter revisions also include outreach plans to assist non-member audit regulators who seek to develop their independence and qualifications for membership, as well as increase their exposure to IFIAR.
IFIAR also agreed to conduct a second survey of members’ inspection findings in 2013. The group released its inaugural global survey of audit inspection findings in December 2012, which can be found along with the work plan on the IFIAR Web site.
The work plan also proposes the establishment of an Enforcement Working Group to assist with cooperation and information sharing on enforcement issues. IFIAR currently has working groups that focus on specific issues such as standard setting, investor concerns, and inspection training.
Another working group, the Global Public Policy Committee, coordinates IFIAR’s dialogue with the six largest global network audit firms.
PCAOB board member Steven B. Harris chairs the IFIAR Investor Working Group, which is responsible for organizing IFIAR’s dialogue with representatives of the investor community.
IFIAR was formed in September 2006 to provide a forum for regulators to share knowledge of the audit market environment and the practical experience gained from their independent audit regulatory activity. The group’s 2012 annual report, which includes brief summaries and highlights of IFIAR members' activities and developments in audit regulation in their jurisdictions, is available on the IFIAR Web site.