Global Audit Regulators Agree on Information Exchange
Members of the International Forum of Independent Audit Regulators agreed in principle on the text of a multilateral arrangement for exchanging information about audit firms during a meeting in Taipei.
IFIAR brings together audit regulators, including Lewis Ferguson of the U.S. Public Company Accounting Oversight Board, to discuss issues related to auditing firms and their work.
At the meeting, hosted by the Financial Supervisory Commission, IFIAR members discussed and reached agreement in principle on the text of a multilateral memorandum of understanding, or MMOU, that would provide a framework for information sharing among those IFIAR members that sign the MMOU once it is finalized. The project began in 2013.
During the meeting, IFIAR members also discussed how changes in the economic environment and the market for audit services have affected the audit profession and audit quality or might affect them in the future, especially in terms of disclosures of audit quality. Panelists and audit profession leaders also discussed a number of other topics, including firm revenue and growth, competition in the audit market, governance within the global audit firm network structure, and quality and extent of resources in the labor market for auditors.
A related background paper, “Current Trends in the Audit Industry,” prepared by the Investor and Other Stakeholders Working Group and Global Public Policy Committee Working Group is available on the IFIAR Web site.
During the meeting, IFIAR members also shared their insights on developments and changes to the auditor’s report and audit committee reporting, focusing on experiences to date with extended reporting in a panel discussion with the chairman of the International Auditing and Assurance Standards Board and an investor representative.
IFIAR members received updates on a coordinated, multijurisdictional audit inspection undertaken to assess practices in group audits. In addition, IFIAR members from smaller regulators met to discuss initiating additional work targeted to serving their needs going forward.
IFIAR members approved for publication a report summarizing the results of an Enforcement Working Group survey conducted for the purpose of developing an understanding of the mandates, objectives, and legal authority of IFIAR members’ enforcement regimes, with the goal of sharing information and enhancing discussion of current and emerging enforcement issues, methodologies, and techniques. The report and a fact sheet provide extra details about the survey. The Enforcement Working Group held its first Enforcement Workshop in Taipei on April 24, which was also hosted by the FSC.
IFIAR also reached agreement in principle to establish a governing board in place of the current governance structure and is evaluating the establishment of a permanent secretariat.
Following the meeting, IFIAR will be led by chair Janine van Diggelen of the Netherlands Authority for the Financial Markets, and vice chair Brian Hunt, CEO of the Canadian Public Accountability Board. “I am delighted to announce Janine and Brian as IFIAR’s new officers,” said outgoing chair Lewis Ferguson in a statement. “I look forward to the next two years and am confident that IFIAR will thrive under their leadership.”
Also during the meeting, IFIAR elected members from Germany, Japan and the United States to its Advisory Council. They join current Advisory Council members from Australia, France, Singapore and the United Kingdom. IFIAR expressed gratitude to outgoing Advisory Council members from Abu Dhabi, Canada and Sri Lanka for their service.
IFIAR members approved a work plan for the new officers’ term. The work plan describes IFIAR’s key initiatives, including intensifying the conversation with global audit firm networks about global audit quality, deepening IFIAR’s dialogue with stakeholders, considering audit standard setting and its governance, and maturing IFIAR’s structures and processes to enhance its effectiveness.