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ACCA Strategic Professional · Advanced Audit and Assurance (International) · International regulatory frameworks for audit and assurance services

A small audit firm's managing partner states that, because her country has its own binding national auditing law, IFAC member bodies have no obligations relating to international standards. Which response is most accurate?

IFAC member bodies are bound by the Statements of Membership Obligations, which require them to support adopting and implementing international standards and to maintain quality assurance and disciplinary arrangements. IFAC itself has no legal power to fine auditors or override national law.

  1. ACorrect, because IFAC membership creates no obligations
  2. BIncorrect, because IFAC member bodies must comply with the Statements of Membership Obligations, which include supporting adoption of international standards, though IFAC cannot override national lawCorrect
  3. CIncorrect, because IFAC can directly fine auditors who ignore ISAs
  4. DCorrect, because Statements of Membership Obligations apply only to the IASB

Explanation

IFAC member bodies commit to the Statements of Membership Obligations, which include promoting adoption and implementation of international standards, quality assurance and investigation and discipline. IFAC has no legal power over individual auditors or national law, so the fining option is wrong.

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