Influence and direction at the pinnacle of accountancy best practice standards

The re-appointment of Marilyn Pendergast, of UHY Advisors, US, to the Transnational Audit Committee (TAC) – as reported in the last UHY exchange – maintains the network's influence and direction at the pinnacle of international accountancy practice.

TAC is the executive wing of the Forum of Firms (FoF), of which UHY is one of only 21 full members globally. FoF's objective is to promote consistent and high-quality standards of financial reporting and auditing practices worldwide.

The Forum, registered as a legal entity in Switzerland, brings together firms that perform transnational audits and involves them more closely with the activities of the International Federation of Accountants (IFAC) in audit and other assurance-related areas.

The TAC provides the official linkage between the Forum and IFAC. Both the Forum and IFAC work together in areas such as standard setting, dialogue with the regulatory community, and promoting convergence to international standards.
In an interview with UHY exchange, Marilyn (pictured below) outlines her work with TAC and describes how she has been able to influence decisions:

Could you give examples of transnational audit best practice, or individual case studies, where you have taken part in discussion and influenced decisions?

Because of my interest in ethics, I focus on that aspect of quality controls and have been involved in the development of independence guidance related to network firms and defining transnational audits. I also participated in the development of guidance related to a globally directed inspection programme. In October 2010 TAC issued a good practice guidance relating to client acceptance and continuance which I believe is a useful document for many of our member firms.

See: http://web.ifac.org/publications/forum-of-firms/good-practice-guidance

How do you see your role as a representative of one of the full member firms of FoF – both in terms of representing UHY and as a contributor to international quality standards?

In participating in TAC as an elected representative of the non-founder members of the Forum of Firms, I believe I have the responsibility to bring the unique concerns of mid-size firms and networks to the table in discussion and implementation of policies. It is important for international quality standards to be clear, focused, understandable and useable for firms of all sizes. As a partner in a UHY member firm, I try to get information from others throughout our network to provide input on the various audit practice and regulatory issues that TAC is working on.

What benefit do you feel UHY achieves by your representation on the TAC?

It is important for UHY and our member firms to have representation so that all perspectives of the profession have input in the continuing dialogue regarding independent auditors and our role in the global financial community. There are different issues in auditing a local, privately held company or a not-for-profit organisation than there are in auditing a worldwide public company, but both require the highest level of professional services. I am honoured to serve as a member of TAC.

How much of your time is taken up by the TAC representation?

At present, I spend between 150 and 200 hours a year in TAC and Forum related activities. There are generally two meetings a year (one in London and one in New York) and two conference call meetings, as well as preparation and responses to papers which may be under discussion. There are some very early morning calls and travel involved as well.

Are your clients aware of your representation on the TAC, and does your representation add weight to your client engagements?

My clients are aware of my participation in TAC and other professional activities and I believe that UHY's willingness to provide support for volunteer activities at every level is very well received by clients. It does not affect the clients for which I am directly responsible, but it does make it clear that UHY is committed to quality practice and recognises our responsibility for participation in these international efforts.

Where do you anticipate the TAC's influences will focus during 2011?

Regulatory matters, particularly in the European Community, will require continued focus in the coming year and working with the IFAC Regulatory Advisory Group will be very important.

TAC will also be organising forums for discussion of emerging issues which will be open to representatives of all FoF members. In the past these have been informative and useful for sharing views as new accounting and auditing issues arise.

As more countries continue to adopt and implement the International Standards, TAC will serve an important role in promoting and assisting in the implementation of the IFAC audit, ethics and education standards, as well as IFRS.

Pictured below is Marilyn with UHY chairman John Wolfgang at the UHY Americas meeting in Cancun, Mexico, June 2010.

"Marilyn is the perfect person to represent UHY on the TAC committee," says John. "It is very important that UHY be represented on TAC because the views of firms like ours in the network need to be heard in this group. Marilyn represents our dynamic middle market clients in this forum and her ability to share those concerns and have them considered is important to the future of global standards development for networks and transnational audits.

Marilyn brings her unique experience and qualities to TAC. She has a very strong background as an audit partner as well as her past leadership skills in both the ethics and independence areas. She has a practical and logical approach to standards setting so that we have clear and concise rules we can implement. I am very proud of what Marilyn has achieved and will continue to bring to this group, as she represents all of UHY.

Marilyn is a managing director of UHY Advisors based in Albany, New York. She is a licensed CPA in the states of New York and Vermont and is a partner with UHY LLP.

In 2006 Marilyn was awarded IFAC's Sempier Award for outstanding contribution to the worldwide accounting profession (the award is made to a recipient only once every four years).

Apart from her current role on the TAC, Marilyn served on IFAC's Ethics Committee for 10 years, six years as chair, and oversaw restructuring of the IFAC Code of Ethics, including auditor independence, to a principles-based approach, which is now being adopted globally.

Marilyn also served on the American Institute of Certified Public Accountants' Ethics Committee for 10 years, including four years as chair. She was the first female president of the New York State Society of Certified Public Accountants (in 1994) and the first non-attorney appointed chairperson of the New York Supreme Court – Third Judicial Department Committee on Professional Standards.

The TAC's responsibilities include:

• Identifying audit practice issues. When the issues suggest that changes in auditing or assurance standards may be required, the TAC recommends to the appropriate IFAC standard-setting board that the issue be reviewed
• Providing a forum to discuss best practices in areas including quality control, auditing practices, independence, and training and development
• Participating in the IFAC Regulatory Liaison Group and identifying qualified candidates to serve on IFAC standard-setting boards
• Acting as a formal conduit for interaction among transnational firms and international regulators and financial institutions with regard to audit quality, systems of quality control, and transparency of international networks.

The TAC has defined transnational audit as an audit of financial statements which are, or may be, relied upon outside the audited entity's home jurisdiction for purposes of significant lending, investment or regulatory decisions. This includes audits of all financial statements of companies with listed equity or debt, and other public interest entities which attract particular public attention because of their size, products or services provided.

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