Participants Representatives of Provisional Members

Transcription

1 Conference Call of the Forum of Firms January 30, 2006 Participants Representatives of Provisional Members Firm Representatives BDO International Peter Chidgey DFK International Simon Fraser Deloitte Touche Tohmatsu Roger Dassen Ernst & Young Randy Fletchall Grant Thornton International Arch Archambault Will Lifford (Chair) HLB International Peter Frost Horwath International Werner Rotach INPACT Brion Smoker IEC Stefano Ciccioriccio KPMG Mark Vaessen Mazars Jean Luc Barlet Moore Stephens International Andrew Nicholl Polaris International Alan Knapp PricewaterhouseCoopers Graham Gilmour RSM International Frank Attwood Urbach Hacker Young International Jack Easton Marilyn Pendergast Firms Participating by Proxy Baker Tilly International (Proxy given to Moore Stephens) Firms Not Participating Jeffreys Henry International IGAF TAGI Constatin PKF january conference call.doc\i 1

2 Staff TAC Russell Guthrie, Director Legal Jim Peterson 1. Introduction 1.1 Welcome Will Lifford welcome participants to the call and outlined the agenda for the call. Will asked RG to inform participants of the outcome of the resolution circulated prior to the meeting and the voting arrangements in respect of the business on the agenda. RG reminded participants of the resolution proposed under Section 33 of the Constitution circulated to members on January 19, In view of the short time frame in achieving the requirements for a meeting, the resolution was stated as: Resolution: FoF members consent to vote on the proposed changes to Section 4 on the 30 January 2006 Conference Call, such action being taken without a meeting. RG indicated that he had received 17 votes in favor, 1 abstention and 0 votes against. As the 17 votes in favor represent more than 2/3 of number of members of the Forum, the resolution had been passed. RG further noted that with 89% of the voting rights present on the call or by proxy, a quorum had been established for purposes of discussion, but for avoidance of doubt on process, the approach using the Section 33 resolution has been used. 2. Constitution WL presented the changes put forward by the Constitution Working Group since the October 26, 2005 TAC conference call. The group met by conference call on December 6, 2005 and January 3, 2006 in addition to consultation by to january conference call.doc\i 2

3 formulate alternative wording in response to the comments raised by the IFAC Board. It was noted that wording was responsive in its clear support for ISAs and convergence of national audit standards with ISAs. The commitment to use ISAs as a basis for audit policies and methodologies was also exemplary of this commitment. The group also noted that the wording for this particular obligation had been subject to extensive debate to achieve as much precision as possible. On a January 26, 2005 teleconference, the TAC also agreed that additional guidance would need to be considered to elaborate on those circumstances when it was not practicable to use ISAs as a basis for audit methodologies. One member raised a question about the definition of network as currently stated in the Constitution and whether an association being designated as a network under the Forum Constitution would imply that the association was a network under the current definition of network in the IFAC Code of Ethics. Several members expressed the view that they did not feel that it was likely that a third party would see a direct linkage in this respect and that reopening the discussion on another part of the Constitution at this stage was not in the best interest of the Forum. WL noted that the TAC approved the changes to Section 4 and recommends to the Forum that: The previous wording: 4) Membership shall be open to Networks and to Firms upon giving notification to the Secretary of the Forum that they meet the following criteria for eligibility, namely that they (or their constituent entities, as applicable): a) Have transnational audit appointments or are interested in accepting such appointments. b) Agree to meet the Forum s membership obligations, with respect to transnational audits, which require Members, under the objective of the Forum to promote consistent and high quality standards of auditing practices world-wide, to: i) Maintain appropriate quality control standards in accordance with International Standards on Quality Control issued by the IAASB in addition to relevant national quality control standards and conduct, to the extent not january conference call.doc\i 3

4 prohibited by national regulation, regular globally coordinated internal quality assurance reviews. ii) Have policies and methodologies so that such audits are conducted in accordance with ISAs, or with PCAOB standards, or with US GAAS, or with national standards that conform to ISAs except where this conflicts with the requirements of national laws or regulations. iii) Have policies and methodologies which conform to the IFAC Code of Ethics for Professional Accountants and national codes of ethics. c) agree to submit to the Secretary of the Forum an annual report, in a form approved by the TAC, indicating that it meets the membership obligations set forth above. Shall be replaced with: 4) Membership shall be open to Networks and to Firms upon giving notification to the Secretary of the Forum that they meet the following criteria for eligibility, namely that they (or their constituent entities, as applicable): a) Have transnational audit appointments or are interested in accepting such appointments. b) Promote the consistent application of high quality audit practices worldwide, including the use of ISAs c) Support convergence of national audit standards with ISAs d) Agree to meet the Forum s membership obligations, with respect to transnational audits, which require Members to: i) Maintain appropriate quality control standards in accordance with International Standards on Quality Control issued by the IAASB in addition to relevant national quality control standards and conduct, to the extent not prohibited by national regulation, regular globally coordinated internal quality assurance reviews. ii) have policies and methodologies for the conduct of such audits that are based, to the extent practicable, on ISAs iii) Have policies and methodologies which conform to the IFAC Code of Ethics for Professional Accountants and national codes of ethics. e) agree to submit to the Secretary of the Forum an annual report, in a form approved by the TAC, indicating that it meets the membership obligations set forth above. WL asked for a vote on the recommendations by the TAC for changes in the Constitution and the vote was unanimously in favour of adopting the changes as noted above. The changes would then be proposed to the IFAC Board at its meeting February 23, january conference call.doc\i 4

5 3. PIOB and MG Meetings WL asked RG the highlights from the PIOB and MG meetings. Detailed briefing notes from the PIOB meeting were included in the meeting papers. RG noted that one PIOB comment, to accelerate the submission of TAC nominations, would be implemented in The remainder of PIOB comments and suggestions would be subject to full discussion at the April meeting. RG noted that the MG meeting was very constructive and that the MG appeared to appreciate the direct answers to their previously submitted questions. Good discussions were held on FoF/TAC activities, audit quality, internal monitoring programs and transparency of networks. A letter from the MG Chair, identifying a number of points for future consideration was included in the meeting papers. 4. Nominations RG noted that Forum members would be receiving a formal call for nominations during the second or third week of February; however Forum members should begin to consider upcoming vacancies on the IFAC standard setting boards. He noted that there would be 1 vacancy on the IAASB, two on the Education Board and two on the Ethics Board. 5. WL thanked members for the participation and adjourned the meeting. Duly signed: Will Lifford Chairman FoF Russell Guthrie Director - TAC january conference call.doc\i 5