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IFAC Task Force Focuses on Restoring Credibility in Financial Statements

(New York/October 18, 2002) – Improving the credibility of financial reporting worldwide is the objective of a new task force appointed by the International Federation of Accountants (IFAC), an organization representing more than 150 accountancy organizations from around the world. The IFAC Task Force on Rebuilding Public Confidence in Financial Reporting will be chaired by John Crow, former Governor of the Bank of Canada, and includes representatives from company management, boards of directors, the investment community, and the accountancy profession

“The task force will provide an international perspective on the problem of the loss of credibility of financial statements. This loss of credibility occurred prior to the collapse of Enron and WorldCom, although these events have made addressing the issue all the more urgent,” comments IFAC President Aki Fujinuma.

“Specifically, the task force will identify and analyze the causes of the loss of credibility, and consider alternative courses of action to restore credibility. These may include recommendations on principles of best practice in the areas of financial and business reporting, corporate governance, and auditor performance,” adds Mr. Fujinuma.

In carrying out its work, the task force will give attention to:

The considerable volume of work already undertaken by IFAC member bodies and others at a national level in addressing the loss of credibility;

Cross-national variation in the extent of the loss of credibility and its causes; and

The emerging patterns of convergence in such areas as financial reporting and corporate governance.

The task force plans to issue a Report mid 2003. This report will outline actions that the task force considers are necessary to restore public confidence in financial statements, with a focus on the role of the accounting and auditing profession.

IFAC is the worldwide organization for the accountancy profession. Its mission is to develop and enhance the profession to enable it to provide services of consistently high quality in the public interest. It achieves this through the issuance of standards and guidance in five key areas — ethics, auditing and assurance services, education, financial and management accounting, and public sector accounting — and through the establishment of a compliance program requiring its member organizations to ensure accountants' adherence to high quality standards.

IFAC's current membership consists of 156 professional accountancy bodies in 114 countries representing more than two million accountants in public practice, education, government service, industry and commerce.

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