THE INTERNATIONAL FEDERATION OF ACCOUNTANTS (IFAC)

The International Federation of Accountants (IFAC) is the global organization for the accountancy profession, committed to protecting the public interest by developing high-quality international standards, promoting strong ethical values, and advocating for the value of professional accountants worldwide (IFAC, 2024). Established in 1977, IFAC's mission is to strengthen the global accountancy profession and contribute to the development of strong international economies. It serves as a forum for over 180 member and associate organizations in more than 135 countries, representing over 3 million professional accountants. Structure and Reform IFAC's structure is governed by a council and a board of directors, which oversee various independent standard-setting boards and committees. These boards include: • International Auditing and Assurance Standards Board (IAASB): Sets standards for auditing, review, other assurance, and quality management services. • International Accounting Education Standards Board (IAESB): Develops standards to improve the quality of accounting education. • International Ethics Standards Board for Accountants (IESBA): Creates and maintains the International Code of Ethics for Professional Accountants. A major reform for IFAC came in 2003 with the creation of the Public Interest Oversight Board (PIOB), an independent body that oversees IFAC’s standard-setting activities to ensure they are responsive to the public interest. This reform was a direct response to a series of high-profile corporate scandals in the early 2000s, which highlighted the need for greater transparency and independence in the standard-setting process. The International Public Sector Accounting Standards Board (IPSASB) The International Public Sector Accounting Standards Board (IPSASB) is an independent standard-setting board within the IFAC structure. Its role is to develop accounting standards for public sector entities around the globe. These standards, known as International Public Sector Accounting Standards (IPSAS), aim to improve the quality, transparency, and accountability of financial reporting by governments and other public sector entities. Structure and Reform The IPSASB operates with a clear mandate to serve the public interest. Its board members are nominated by various stakeholders, including governments, public sector entities, and accountancy organizations, and are selected for their expertise. The board follows a rigorous due process in developing standards, which includes public consultation and exposure drafts. A key reform for the IPSASB was the shift from cash-basis to accrual-basis accounting. For years, many governments used a simple cash-basis system, which only records transactions when cash is received or paid. The IPSASB has been a key advocate for and driver of accrual-basis accounting, which recognizes transactions when they occur, regardless of the timing of cash flows. This reform provides a more comprehensive and accurate picture of a government's financial position, including its assets, liabilities, and future commitments, thereby enhancing fiscal transparency and accountability.