The International Federation of Accountants and the Institute of Internal Auditors have forged an agreement to work together to advance risk management and internal controls, although they haven't defined exactly what they will do under this newly established relationship.
The two groups signed a “memorandum of understanding” to coordinate, collaborate, and share resources in their common quest to restore public confidence in business reporting. and best practices in government, risk management, and internal controls, plus audit methods and the application of international standards.
The groups agreed they share common interests in implementing international auditing and accounting standards, strong risk management practices, including designing and implementing effective and efficient internal controls, and effective governance processes. IFAC, an association of accounting organizations globally representing 2.5 million accountants in practice, considers itself to be the global organization for the accounting profession. IFAC supports standard-setting bodies that write global standards for auditing, ethics, education, and public sector accounting. IIA calls itself the voice, advocate and principal educator of the internal audit profession, writing professional standards and certifying internal auditors.
IFAC President Warren Allen says IFAC signs MOUs with other organizations where it believes it can find synergies to achieve its objectives, such as with the International Accounting Standards Board and the International Integrated Reporting Council. “This MOU formalizes and modernizes a relationship that goes back to 2004,” he says. “With the two of working together on certain common things we feel like we can achieve more going forward than each of us could achieve individually.”
During Allen's 16-month presidency, he says, the groups have worked together on thought leadership pieces. Going forward, he says the groups could also work together on similar initiatives around governance, the role of the audit committee, and public sector financial management reform. “That is a particular goal of both organizations,” he says.
Richard Chambers, president and CEO of IIA, says his organization also has relationships with other organizations to try work toward common goals. With IFAC, IIA would like to focus on where it can work to further promote internal controls, risk management, and corporate governance, he says. “We have some important shared goals and visions about standards and management around the world,” he says. IIA has a similar alliance with ISACA and with the Canadian Accounting Standards Board, according to Chambers. IIA also works with the Risk and Insurance Management Association.
The American Institute of Certified Public Accountants formed a similar relationship in 2012 with the Chartered Institute of Management Accountants in Europe to develop a global certification for chartered management accountants and to advance the American CPA designation in other countries.