International Federation of Accountants (IFA)

Organization of international representatives whose purpose is to develop and enhance concordance with respect to standards and accounting practices on a worldwide basis. It was formed in 1977.

The International Federation of Accountants (IFAC) was officially constituted in October 1977 at the World Congress of Accountants in Munich. Its constitution was signed by sixty-three accountancy bodies in forty-nine countries. Its original terms of reference emphasized (1) the promotion of harmonized accounting standards, that is, measurement and disclosure standards, and (2) the development of harmonized professional standards, for example, auditing, education, and ethical standards. This duality of purpose placed IFAC in potential conflict with the International Accounting Standards Committee (IASC), whose mission also embraced accounting harmonization. To minimize duplication of effort, both organizations agreed in 1982 to have a uniform membership in which IASC would concentrate on promoting harmonized accounting standards while IFAC would focus on promoting harmonized professional standards.

Membership

Support for IFAC's quest to develop a truly international and cohesive accountancy profession is reflected in its expanded membership of one hundred twenty-three professional accountancy bodies in eighty-seven countries. As of 1999, IFAC recognizes three types of members.

1. Full membership is open to national accountancy organizations that have a professional standard-setting role and that possess rigorous credentialing standards.
2. Associate membership is confined to national accountancy organizations that do not meet full membership criteria.
3. Affiliate membership is open to international organizations that have an interest in the accountancy profession.

Organization

IFAC's governance structure is made up of the following components:

1. An Assembly comprised of representative from each member accountancy organization. Meeting every two and half years, it is responsible for electing Council and approving changes to IFAC's constitution.
2. A Council consisting of elected representatives from eighteen countries serving two-and-a-half-year terms. It establishes broad policies, appoints various technical committees and task forces, and oversees IFAC's operations through an Executive Committee.
3. An Executive Committee comprised of a president, deputy president, director general, and three other members of Council. It is responsible for the implementation of Council's established policies.
4. A Secretariat, headquartered in New York City, that provides overall direction and administration.
5. Technical Committees and Task Forces that carry on the work of IFAC. Each issues professional guidelines and relevant documents.

Committee Activities

Six standing committees make up the backbone of the IFAC:

Education Committee: issues guidelines on entry-level and continuing professional education requirements, including prequalification, formal education, tests of professional competence, practical experience requirements and continuing education

Ethics Committee: promotes a current code of ethics for accountants

Financial and Management Accounting Committee: works to increase financial and management accountants' awareness of their professional responsibilities via publications, sponsored research, and forums for the exchange of ideas

Public Sector Committee: produces guidelines and studies of international applicability to national, regional, and local governments and related agencies

Information Technology Committee: assesses and relates the impact of information technology on accountant's roles and responsibilities

Membership Committee: strives to increase IFAC's membership and maintain stringent membership criteria

IFAC's Council occasionally appoints special task forces to address important issues. Six task forces active in the mid-1990s include:

• Anti-Corruption
• General Agreement on Trade in Services
• Legal Liability
• Quality Assurance
• Small and Medium Enterprise
• Structure and Organization

IFAC has close ties with other international organizations such as IASC and the International Organization for Securities Commissions (IOSCO). The financial statements of an increasing number of companies are being audited in conformity with IFAC's International Standards on Auditing.

Further information on IFAC, its membership, activities, pronouncements and publications can be secured from the IFAC Web site, http://www.ifac.org/FactsAndFigures/index.html.

(See also: International Accounting Standards)

Bibliography

Choi, Frederick D. S., Frost, Carol Ann, and Meek, Gary K. (1999). International Accounting, 3rd ed. Upper Saddle River, NJ: Prentice-Hall.

Gruner, John W. and Salter, Stephen. (1997). "Building a Cohesive Accountancy Profession," in International Accounting and Finance Handbook, 2nd ed., ed. Frederick D. S. Choi. New York: John Wiley and Sons.

[Article by: FREDERICK D. S. CHOI]

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