The Journal The Authority on Global Business in Japan

The International Forum of Indepen­dent Audit Regulators (IFIAR) was established in 2006 by independent audit regulators from 18 jurisdictions to serve the public interest and enhance investor protection by improving audit quality globally. Now comprising 52 jurisdictions representing Africa, North and South America, Asia, Oceania, and Europe, the group has become a global leader in driving audit quality and addressing challenges facing audit professionals.

On September 11, IFIAR Executive Director Carl Renner and Senior Policy Officer Delon Abrams spoke to members of the American Chamber of Commerce in Japan (ACCJ) at an event hosted by the ACCJ Financial Services Forum at the Roppongi Hills Club.

Renner leads and Abrams helps guide policy at IFIAR’s newly established secretariat in Tokyo, which puts Japan at the center of audit leadership globally. “When IFIAR made the decision to establish a permanent secretariat, they asked the members who would like to host,” explained Renner, who said that the two finalists were Switzerland and Japan.

“Switzerland may have seemed an obvious choice, given their experience and location, but the Japanese government was fully behind the Tokyo bid,” he continued.

In light of the continuing develop­ment of audit oversight regimes throughout Asia, IFIAR believes they will benefit from having a permanent presence in Japan. This coincides with developments within IFIAR itself. “By setting up a secretariat and developing a governing board structure, the organization is well positioned to become more proactive.”

Abrams said the secretariat is really working to support the infrastructure of IFIAR with the working groups that are completing the majority of the work to deliver IFIAR’s strategic objectives.
The six working groups are:

  • International Cooperation
  • Investor and Other Stakeholders
  • Inspection Workshop
  • Standards Coordination
  • Enforcement
  • Global Audit Quality

The last, Renner said, is particularly important because it leads IFIAR’s discussions with the Global Public Policy Committee network firms in relation to their initiatives to improve audit quality.

Renner explained how, to achieve its mission of serving the public interest and enhancing investor protection by improving audit quality globally, IFIAR seeks to influence the global audit firm networks and audit standard setters to move in directions the group thinks will help improve quality. He added that, while it is solely the job of the network firms to improve quality, the contributions of IFIAR bring the experience of regulators from around the world to the table.

IFIAR’s overall goals are to:

  • Improve audit quality oversight globally
  • Facilitate capacity building, learning, and cooperation among members
  • Contribute to global financial stability and eco­nomic growth

Renner put emphasis on the last matter, saying: “That is something that some of our members feel very, very strongly about. They want IFIAR to be cognizant of how we fit within the economic chain and how audit fits.”

Renner and Abrams also spoke about IFIAR’s three-year objectives. Boosting the membership numbers to strengthen our global reach is a key target for IFIAR. “In South America, we only have one member: Brazil. We need to grow there,” Renner said.

“The interconnectedness and volatility of the global economy has grown in prominence recently, with attendant challenges to audit such as fees and margins—and even the relevance of audit,” he added. “If you look at the press in the past year or so, I’d say the confidence in audit is the lowest it has been, probably ever.” IFIAR responded to these challenges with a strategic shift: the development of a first Strategic Plan (2018–2021), which was approved by the members in April.

To develop a more proactive approach to shaping the future of dialogue on audit quality and oversight, IFIAR conducts an annual Inspection Findings Survey. This builds upon the individual inspections of audit firms that IFIAR members individually conduct, to observe trends in audit quality and the consistency in execution of audit inspections. The survey aims to give a clearer under­standing of inspection themes and where improve­ment is needed. The most recent findings were made public in March of this year.

Megan Casson is a staff writer at Custom Media for The ACCJ Journal.