The Professional Accountants in Business (PAIB) Committee met in Hong Kong, April 22 – 24, 2008. This summary is for information purposes only.

Developing International Good Practice Guidance (IGPG)

The PAIB Committee continues to give momentum to developing International Good Practice Guidance (IGPGs) as a high priority. In February 2009 the committee has published the IGPG, Evaluating and Improving Governance in Organizations. So far, the publication has been used as part of the IFAC submission to the recent G20 summit, and at a recent OECD meeting on governance issues arising from the crisis. The IGPG complements the (more legalistic) 2004 OECD Principles of Corporate Governance, as it is specifically focused on what professional accountants can/should do to evaluate and improve governance in their organizations by balancing performance and conformance. The committee is planning to issue a specific article on the synergy between the OECD and IFAC documents.

The committee also approved a revised IGPG on Evaluating and Improving Costing in Organizationsfor issuance in June. This IGPG establishes fundamental costing principles that will help professional accountants in business and their organizations to evaluate and improve their approach to providing relevant and reliable managerial information. In the context of the Preface to International Good Practice Guidance, which sets the purpose of IGPGs, the principles provide a benchmark to good practice in applying costing systems and methods and using costing information.

The committee is currently also conducting exploratory workrelated to preparing an IGPG on calculating and using the cost of capital, to complement its 2008 IGPG on Project Appraisal Using Discounted Cash Flow, and considering an IGPG on evaluating and improving internal control in organizations.

IFAC Sustainability Framework

Perhaps the most visible of the committee’s outputs was the launch in February of the web-based Sustainability Framework. This providesthe tools for professional accountants in business tointroduce and integrate sustainability into their organization. The frameworkcovers all the key areas of relevance and importance to the role of PAIBs. It has links to member body and other resources and good practice, taking users to the most relevant and useful references.

The Sustainability Framework has had unprecedented success. In addition to a large number of downloads, there have also been articles promoting it in the magazines and journals of many member bodies, including ICAEW, CIMA, CMA Canada, and AICPA. Earlier in the year, Ian Ball met with Paul Druckman, the Chair of the Executive Board managing the Prince of Wales Accounting for Sustainability project, to discuss the sustainability issues and the IFAC Framework project. This is being followed up with further discussions at an executive and operational level to consider how IFAC and the Prince of Wales project can collaborate and perhaps have a more coordinated approach to supporting the accountancy profession in relation to sustainability.

Roles, Domains and Competencies of Professional Accountants in Business

The PAIB Committee is developing a discussion paper on what employers expect of PAIBs in 2015, which involves better defining and promoting the diverse roles of PAIBs, and their key differentiating competences and skills. The Committee approved to integrate an additional initiative to investigate the need for the development of a comprehensive international competency framework for people responsible for the oversight of the preparation of financial statements of public interest entities.

Business and Financial Reporting

The PAIB Committee is actively supporting and contributing to the Board project on business reporting, which recently published the results of aglobal research study, entitledDevelopments in the Financial Reporting Supply Chain—Results from a Global Study among IFAC Member Bodies,and is currently working on a series of interviews with investors, preparers, auditors, standard setters, and regulators from around the globe to provide practical solutions for making business reporting more useful and for further improving the communication (on business performance) between a business and its stakeholders. In addition, the PAIB Committee is also considering a response to the IASB exposure draft on management commentary and participating in IFAC projects on XBRL and revenue recognition.

Articles of Merit

In March, the PAIB Committee published the winners in its annual Articles of Merit Award Program for Distinguished Contribution to the Roles and Domain of Professional Accountants in Business. The committee decided to also continue this program in 2009 and is considering minor refinements to the way it is run to allow for the exposure of a larger number of high quality articles.

The Financial Crisis

At its meeting, the PAIB Committee discussed the pivotal role of professional accountants in business in addressing the consequences of the current financial and economic crisis, for example in supporting their organizations in regaining control by better understanding the risks they face and getting their (governance) basics right. In this respect, the committee supports the continued development of the resources relevant to PAIBs in IFAC’s financial crisis webpage and felt that there continues to be room to leverage the committee’s work to support IFAC’s strategic theme, to be the international voice of the accountancy profession.

International forum for PAIBs

As part of the communications process of the governance IGPG,the PAIB Committee has, together with the Hong Kong Institute of Certified Public Accountants, hosted a forum in which more than 150 PAIBs from around the globe discussed their role in upholding high standards of governance and enhancing performance through effective risk management and internal control policies and practices.

Date of Next Meeting

The next PAIB Committee meeting will be held on October 7-9, 2009in New York.