The Monitoring Group has published a new paper highlighting the importance to investors, issuers, national standard-setters and regulators of high-quality audits conducted in accordance with standards developed by an independent and inclusive international audit and ethics standard-setting structure.
The Monitoring Group is a group of international financial institutions and regulatory bodies responsible for the overall governance of the international audit and ethics standard-setting system, including periodic effectiveness reviews.
Members include the Basel Committee on Banking Supervision (BCBS), European Commission (EC), the Financial Stability Board (FSB), the International Association of Insurance Supervisors (IAIS), the International Forum of Independent Audit Regulators (IFIAR), the International Organization of Securities Commissions (IOSCO), and the World Bank.
In July 2020, it issued recommendations on strengthening the international audit and ethics standard-setting system.
The new paper points to academic research showing cost-reduction benefits for debt and equity issuers whose financial reporting is subject to high-quality independent audits.
In addition, it said that the benefits “far outweigh” the costs of operating the independent standard-setting structure.
While steps have already been taken to implement the Monitoring Group’s recommendations, the report notes the need to maintain these improvements through a “sustainable long-term multi-stakeholder funding mechanism” that supports the independence of the standard-setting structure.
“It is in the public interest that all stakeholders in the financial reporting ecosystem who benefit from a single set of high-quality international auditing and ethics standards contribute to support long-term financial stability of the standard-setting system,” according to the report..
To date, the work of international standard-setters International Auditing and Assurance Standards Board (IAASB), International Ethics Standards Board for Accountants (IESBA) and Public Interest Oversight Board (PIOB) has primarily relied on funding from the accountancy profession.
“As we continue our journey to implement the MG Recommendations, we are excited about the progress that we have made to date which has strengthened the international audit-related standard-setting structure, ” said Jean-Paul Servais, co- chair of the Monitoring Group.
He added, “We look forward to continuing this journey as we build a stable funding model that contributes to the objectives outlined in the MG Recommendations.”
Paul Munter, co-chair of the Monitoring Group, said, “While we have made many important enhancements to the international audit-related standard-setting structure in the past year, securing financial commitments from a diverse set of stakeholders will further our efforts to achieve a more independent structure.”
©Markets Media Europe 2022
[divider_to_top]
