INTERNATIONAL STANDARDS

TABLE OF CONTENTS

1.1 Introduction

1.2 Origin and evolution

1.3 Definition

1.4 Standard setting board

1.5 Scope of International standards

1.6 Principles of International standards

1.7 Objectives of International standards

1.8 Implementation of international standards

1.9 Advantages of International standards

1.10. Limitations of International standards

1.11. Conclusion
1.1 Introduction -an overview of International standards for supreme audit Institutions

Supreme Audit Institutions (SAIs) across the world are committed to improving the quality of

their work and progressively carrying out their audits using international standards. Adopting

international standards can be a major challenge for SAIs, especially for those in complex and

challenging contexts. Well planned and coordinated support from international development

partners can make a difference and speed up the process. For the SAI to achieve its objectives,

and to be able to perform as a key player in a country’s public financial management (PFM)

system, it is of great importance that it is a trustworthy organization. To present high-quality

audit reports which can make a difference in enhancing the transparency and democratic

processes of a country, the SAI needs both competence and integrity. To ensure that the SAI can

live up to these expectations, support of the development of the public sector in general is

needed. Support for the SAI’s independence and implementation of international standards in the

auditing process must be timed appropriately in relation to the development of the public sector,

including the PFM environment.

The International Standards of SAIs (ISSAIs), updated as the INTOSAI Framework of

Professional Pronouncements7 (IFPP), are the authoritative international standards on public

sector auditing that aim to ensure the quality of the audits conducted. To comply or meet with

ISSAIs, SAIs establishes policies and procedures for their engagements. Required steps are

outlined in policies, audit manuals and guidelines, systems of quality control, and various other

audit tools. They guide auditors to ensure audit engagements are conducted according to

professional standards and SAI policies. Supreme Audit Institutions (SAIs) perform a vital role

in the functioning of governments as they inform legislative bodies and other stakeholders

through their independent audit reports. They help promote good governance, accountability, and
transparency. The work of SAIs in reducing waste and abuse of public resources has the indirect

effect of making more money available for programs that fight poverty.

Building on international standards in both internal development and audits increases the

credibility and reliability of the SAI’s work. A credible SAI will have a positive influence on the

development of the PFM system and the public sector in general. When a SAI has decided to

implement international standards, the road to compliance is greatly dependent on the context in

which it works. What is the state of the public sector in general in the country and of the legal

framework? What government entities, public sector processes and policy areas are in place

which need and can be audited? How can that audit be carried out and reported? What control

systems are working and what kind of audits are relevant in this environment? The task of a SAI

must be to audit the public sector financial activities of its country and not primarily international

development projects. This is especially important in contexts where SAI resources are scarce

and the context challenging.

1.2 The Evolution of International Standards

Metrological traceability follows international standards established by international research

organizations such as the International Committee for Weights and Measures (CIPM) as well as

national standards established by research institutes in each country. With the globalization of

the economy, conformity with such standards is in high demand. Under the International

Committee for Weights and Measures, a research organization called the International Bureau of

Weights and Measures (BIPM) is working on basic research into the International System of

Units. Complying with international standards has become imperative amid the globalization of

manufacturing activities. Today, internationally and mutually approved metrological traceability

is essential for dimensional measurement results to be recognized as being universal regardless

of where they were generated.

1.3 Definition of International standards

International standards are standards developed by international standards organizations. An

international standard is a document that has been developed through the consensus of experts

from many countries and is approved and published by a globally recognized body. It comprises

rules, guidelines, processes, or characteristics that allow users to achieve the same outcome time

and time again.

An international standard is a technical standard developed by one or more international

standards organizations. International standards are available for consideration and use

worldwide. The most prominent such organization is the International Organization for

Standardization (ISO). Other prominent international standards organizations include the

International Telecommunication Union (ITU) and the International Electro technical

Commission (IEC). Together, these three organizations have formed the World Standards

Cooperation alliance.

1.4 Independent Standard- Setting Boards

The International Federation of Accountants (IFAC) supports four independent standard-setting

boards. Each of these groups is comprised of volunteers from around the world, who represent a

broad range of experience and include both practitioners and non-practitioners. IFAC strives to

maintain balance within each group in terms of gender, geography, and sector of the accountancy

profession. The standard-setting boards follow a rigorous due process that supports the

development of high-quality standards in the public interest in a transparent, efficient, and

effective manner. They all include public members, receive input from independent groups and

individuals to ensure that their work serves a balanced and diverse constituency, and have

Consultative Advisory Groups that provide public interest perspectives,

IFAC provides the structures and processes that support the development of high-quality

international standards. The standards IFAC supports—in the areas of auditing, assurance, and

quality control; public sector accounting; accounting education; and ethics—are an important

part of the global financial infrastructure and contribute to economic stability around the world.

In addition, through its member bodies, IFAC provides tools and guidance to facilitate the

adoption and support implementation of standards and support professional accountants in

business and small and medium practices. IFAC supports the development of the accountancy

profession in emerging economies, and speaks out on public interest issues where the

profession’s voice is most relevant. Through all of these activities, IFAC promotes its values of

integrity, transparency, and expertise.

The Public Interest Oversight Board (PIOB) oversees the activities of the International

Accounting Education Standards Board, International Auditing and Assurance Standards Board,

and International Ethics Standards Board for Accountants, as well as IFAC’s Compliance

Advisory Panel (CAP). The PIOB ensures that these activities are properly responsive to the

public interest; that due process is followed, including international exposure and consultation;

and that the views of all those affected by new standards are thoroughly considered. PIOB

members are appointed by international institutions and regulatory authorities, comprising the

International Organization of Securities Commissions, the Basel Committee on Banking

Supervision, the International Associate of Insurance Supervisors, the International Forum of

Independent Audit Regulators, the European Commission, and the World Bank. The followings

are the main standard setting organizations.

International Auditing and Assurance Standards Board (IAASB)

The IAASB sets International Standards on Auditing (ISAs). As of November 2011, over 75

jurisdictions are using or have signaled their intent to use the clarified ISAs, which became

effective for financial statements for periods ending after December 15, 2009. In addition, the 24

global accounting networks that are members of the Forum of Firms have all committed to

follow the clarified ISAs in their transnational engagements. The IAASB also sets assurance

standards, including those for review engagements, as well as standards for related services.

International Accounting Education Standards Board (IAESB)

The IAESB sets International Education Standards (IESs). It also develops and issues guidelines

and information papers on pre-qualification education, training of professional accountants, and

continuing professional education and development.

International Ethics Standards Board for Accountants (IESBA)

The IESBA develops the Code of Ethics for Professional Accountants (the IESBA Code). The

IESBA Code applies to all professional accountants, whether in public practice, business,

education, or the public sector. IFAC member bodies and firms issuing reports in accordance

with ISAs must apply independence standards that are at least as stringent as those stated in the

IESBA Code. In addition, the 24 global accounting networks have all committed to follow the

Code in their transnational engagements.

International Public Sector Accounting Standard Board (IPSASB)

The IPSASB sets International Public Sector Accounting Standards (IPSASs) for use by public

sector entities, including national, regional, and local governments, and related governmental

agencies. A key part of the IPSASB’s strategy is to converge the IPSASs, to the extent

appropriate, with the International Financial Reporting Standards (IFRSs), which are issued by

the International Accounting Standards Board (IASB), for private entities.

1.5 Scope of International standards

IFAC has long recognized that a fundamental way to protect the public interest is to develop,

promote, and enforce internationally recognized standards. High-quality international standards

help promote the growth and development of organizations of all sizes—from public interest

entities to small- and medium-sized entities. As such, they directly or indirectly benefit all

accountants worldwide—in small, medium-sized, and large public practices, education,

government services, and business. International standards are used in both sectors.

In the Private Sector

High-quality international standards enable investors and others to compare enterprises in a

transparent way, and therefore enable them to make more informed investing decisions. They

also support the credibility of information upon which investors and other stakeholders depend

and, therefore, increase investor confidence. This, in turn, strengthens global markets and trade

by:

 Promoting more efficient markets

 Reducing economic uncertainty

 Enhancing international financial stability

 Strengthening economic growth and development in emerging economies

 Increasing foreign direct investment

In the Public Sector

High-quality international standards help protect the public and investors in government bonds

by ensuring that governments and other public entities are held to the same level of transparency

and accountability as the private sector. This is especially relevant as many governments, in

addressing the global financial crisis, have assumed vastly expanded financial responsibilities

and are seeking ways to prevent future sovereign debt crises. The current sovereign debt crisis

has brought to light as never before the need for better financial reporting by governments

worldwide, and the need for improvements in the management of public sector resources. Strong

and transparent financial reporting has the potential to improve public sector decision making,

make governments more accountable to their constituents, and enhance global fiscal stability and

sustainability.

1.6 Principles of International standards

The following principles and procedures should be observed, when international standards,

guides and recommendations (as mentioned under Articles 2, 5 and Annex 3 of the TBT

Agreement for the preparation of mandatory technical regulations, conformity assessment

procedures and voluntary standards) are elaborated, to ensure transparency, openness,

impartiality and consensus, effectiveness and relevance, coherence, and to address the concerns

of developing countries.
The same principles should also be observed when technical work or a part of the international

standard development is delegated under agreements or contracts by international standardizing

bodies to other relevant organizations, including regional bodies. Some of the principles are:-

1. Transparency

All essential information regarding current work programs, as well as on proposals for standards,

guides and recommendations under consideration and on the final results should be made easily

accessible to at least all interested parties in the territories of at least all WTO Members.

Procedures should be established so that adequate time and opportunities are provided for written

comments. The information on these procedures should be effectively disseminated.

In providing the essential information, the transparency procedures should, at a minimum,

include:

1. the publication of a notice at an early appropriate stage, in such a manner as to enable

interested parties to become acquainted with it, that the international standardizing body

proposes to develop a particular standard;

2. the notification or other communication through established mechanisms to members of

the international standardizing body, providing a brief description of the scope of the

draft standard, including its objective and rationale. Such communications shall take

place at an early appropriate stage, when amendments can still be introduced and

comments taken into account;

3. upon request, the prompt provision to members of the international standardizing body of

the text of the draft standard;

 4. the provision of an adequate period of time for interested parties in the territory of at least

all members of the international standardizing body to make comments in writing and

take these written comments into account in the further consideration of the standard;

5. the prompt publication of a standard upon adoption; and

6. to publish periodically a work programme containing information on the standards

currently being prepared and adopted.

It is recognized that the publication and communication of notices, notifications, draft standards,

comments, adopted standards or work programmes electronically, via the Internet, where

feasible, can provide a useful means of ensuring the timely provision of information. At the same

time, it is also recognized that the requisite technical means may not be available in some cases,

particularly with regard to developing countries. Accordingly, it is important that procedures are

in place to enable hard copies of such documents to be made available upon request.

2. Openness

Membership of an international standardizing body should be open on a non-discriminatory basis

to relevant bodies of at least all WTO Members. This would include openness without

discrimination with respect to the participation at the policy development level and at every stage

of standards development, such as the:

1. proposal and acceptance of new work items;

2. technical discussion on proposals;

3. submission of comments on drafts in order that they can be taken into account;
 4. reviewing existing standards;

5. voting and adoption of standards; and

6. dissemination of the adopted standards.

Any interested member of the international standardizing body, including especially developing

country Members, with an interest in a specific standardization activity should be provided with

meaningful opportunities to participate at all stages of standard development. It is noted that with

respect to standardizing bodies within the territory of a WTO Member that have accepted the

Code of Good Practice for the Preparation, Adoption and Application of Standards by

Standardizing Bodies (Annex 3 of the TBT Agreement) participation in a particular international

standardization activity takes place, wherever possible, through one delegation representing all

standardizing bodies in the territory that have adopted, or expected to adopt, standards for the

subject-matter to which the international standardization activity relates. This is illustrative of the

importance of participation in the international standardizing process accommodating all relevant

interests.

3. Impartiality and Consensus

All relevant bodies of WTO Members should be provided with meaningful opportunities to

contribute to the elaboration of an international standard so that the standard development

process will not give privilege to, or favour the interests of, a particular supplier/s, country/ies or

region/s. Consensus procedures should be established that seek to take into account the views of

all parties concerned and to reconcile any conflicting arguments.

Impartiality should be accorded throughout all the standards development process with respect

to, among other things:

1. access to participation in work;

2. submission of comments on drafts;

3. consideration of views expressed and comments made;

4. decision-making through consensus;

5. obtaining of information and documents;

6. dissemination of the international standard;

7. fees charged for documents;

8. right to transpose the international standard into a regional or national standard; and

9. revision of the international standard.

4. Effectiveness and Relevance

In order to serve the interests of the WTO membership in facilitating international trade and

preventing unnecessary trade barriers, international standards need to be relevant and to

effectively respond to regulatory and market needs, as well as scientific and technological

developments in various countries. They should not distort the global market, have adverse

effects on fair competition, or stifle innovation and technological development. In addition, they

should not give preference to the characteristics or requirements of specific countries or regions

when different needs or interests exist in other countries or regions. Whenever possible,
international standards should be performance based rather than based on design or descriptive

characteristics.

Accordingly, it is important that international standardizing bodies:

1. take account of relevant regulatory or market needs, as feasible and appropriate, as well

as scientific and technological developments in the elaboration of standards;

2. put in place procedures aimed at identifying and reviewing standards that have become

obsolete, inappropriate or ineffective for various reasons; and

3. put in place procedures aimed at improving communication with the World Trade

Organization.

5. Coherence

In order to avoid the development of conflicting international standards, it is important that

international standardizing bodies avoid duplication of, or overlap with, the work of other

international standardizing bodies. In this respect, cooperation and coordination with other

relevant international bodies is essential.

6. Development Dimension

Constraints on developing countries, in particular, to effectively participate in standards

development, should be taken into consideration in the standards development process. Tangible

ways of facilitating developing countries' participation in international standards development

should be sought. The impartiality and openness of any international standardization process

requires that developing countries are not excluded de facto from the process. With respect to

improving participation by developing countries, it may be appropriate to use technical

assistance, in line with Article 11 of the TBT Agreement. Provisions for capacity building and

technical assistance within international standardizing bodies are important in this context.

1.7 Objectives of International standards

In today’s globalized environment, business does not operate in just one country rather they

operate around the world. However, it must be emphasized that around the globe different

countries follow different accounting standards. This leads to a need for a global set of standards.

Standards form the basis for professionalization of auditors and audit organizations by providing

a structured process for the audit work. Common standards can improve opportunities for

exchange of professional views and experiences across national and sector borders. Globally

accepted standards also provide a common language between public and private sector auditors

in areas of similar responsibilities.

International standards are available for consideration and use worldwide. One prominent

organization is the International Organization for Standardization. International standards may be

used either by direct application or by a process of modifying an international standard to suit

local conditions. The adoption of international standards results in the creation of equivalent,

national standards that are substantially the same as international standards in technical content,

but may have editorial differences as to appearance, use of symbols and measurement units,

substitution of a point for a comma as the decimal marker, and differences resulting from

conflicts in governmental regulations or industry-specific requirements caused by fundamental

climatic, geographical, technological, or infrastructural factors, or the stringency of safety

requirements that a given standard authority considers appropriate.

International standards are one way of overcoming technical barriers in international commerce

caused by differences among technical regulations and standards developed independently and

separately by each nation, national standards organization, or company. Technical barriers arise

when different groups come together, each with a large user base, doing some well-established

thing that between them is mutually incompatible. Establishing international standards is one

way of preventing or overcoming this problem.

The use of globally accepted standards will simplify benchmarking, regional quality assurance

initiatives and peer reviews as well as the sharing of experiences in other ways. Using similar

audit methods in different countries can inspire organizations to continuous improvement.

Applying globally accepted standards will strengthen the audit profession in general.

High-quality international standards help promote the growth and development of organizations

of all sizes—from public interest entities to small- and medium-sized entities. As such, they

directly or indirectly benefit all accountants worldwide—in small, medium-sized, and large

public practices, education, government services, and business.

The International Standards for Auditing (ISAs) that are contained in the ISSAIs for Financial

Auditing are only available in English. However, in many countries the national institutes for

chartered accountants (or equivalent) have undertaken the responsibility to translate the ISAs

into the domestic language in accordance with set requirements.

1.8 Implementation of international standards

 The draft International Standards and Guidelines Implementation Framework (ISGIF) is

prepared to support implementation of Article 9 of the Framework Agreement on Facilitation of

Cross-border Paperless Trade in Asia and the Pacific (FA). Article 9 of the FA recommends

application of international standards and guidelines for the purpose of ensuring regional and

global interoperability in paperless trade and supporting development of safe, secure and reliable

communications protocols for the exchange of trade-related data and documents in electronic

form. It also recommends participation in the development of international standards and best

practices related to cross-border paperless trade.

1) International Standards and Guidelines

An international standard is a standard developed by an international standard body. Taking part

in developing a standard is open at least to its members. There are different layers covered by

international standards, such as “Political layer”, “Organizational layer”, “Semantic layer” and

“Technical layer”. “Political layer” and “Organizational layer” are referred at the business

process analysis phase. Standards for “Semantic layer” are used at the data harmonization and

modeling phase. Standards for “Technical layer” are used at the system implementation design

phase. International standards and guidelines for trade facilitation can be found in relevant tools

and guides such as UNNExT tools, including Business Process Analysis (BPA) Guide or Data

Harmonization and Modeling Guide.

2) Conformance

It is recommended that implementation of international standards follows conformance

statements of those standards wherever such statements are provided. However, it should be

noted that it is usually difficult to have full implementation conformance to certain standard; in
such cases, it is recommended to implement some parts of a standard (Compliant) with

indication of conformance level.

There are 4 levels of conformance to be considered while adapting the standards.

Consistent: The implementation has some features in common with the standard specification

i.e. it has restrictions. However it also has added features i.e. it is also extended. The common

features are implemented in accordance with the specification. However, some features in the

specification are not implemented, and these features are not covered by the standard

specification.

Compliant: Some features in the standard specification are not implemented, but all features

implemented are covered by the specification, and in accordance with it. This would be the most

typical scenario, which are a subset of the standard.

Conformant: All the features in the architecture specification are implemented in accordance

with the specification, but some more features are implemented that are not in accordance with

it.

Fully Conformant: There is full correspondence between standard specification and

implementation. All specified features are implemented in accordance with the specification, and

there are no features implemented that are not covered by the specification.

As “Fully Conformant” is difficult to implement adapting the local political and organizational

environment, “Compliant” or “Conformant” is recommended. For the interoperability view, it

should be specified that which parts of the standard are not implemented for “Compliant”, or

which parts of implementation are out of the standard specifications for “Conformant”.
(3) International Standard Body

There are several international bodies developing standards and guidelines for paperless trade,

such as UN organizations (UNESCAP, UNECE, UNCITRAL, UN/CEFACT, ITU), International

Organization for Standardization (ISO), International Electro technical Commission (IEC),

World Customs Organization (WCO), Internet Engineering Task Force (IETF), etc.

1.9 Advantages of International standards

The standard development process is an open process that can be joined by any interested entity

(companies, universities, individuals) via national standardization bodies affiliated to ISO. The

development of a standard is a collective and collaborative effort that follows open calls for

technologies, in which participants’ contributions are selected based on predefined performance

criteria.

In comparison to proprietary technologies developed by private companies, research laboratories

or individuals, an International Standard offers higher degrees of security and reliability in

accessing and using the standard technology in proprietary products by profiting from non-

discriminatory and reasonable licensing terms enforced by a well-established ISO policy.

International Standards provide:

 Quality and reliability,

 Consistency in the delivery of services,

 Transparency in production and information,

 Suitability of products for vulnerable populations,

  Credibility of standards to support consumer protection laws, and

 Definition of strict conformance tests.

International Standards issued by ISO, such as MPEG-G, conform to the ISO patent policy

requiring that any patent holder is willing to negotiate licenses with other parties on a non-

discriminatory basis with reasonable terms and conditions (RAND). This ensures that end users,

in most national legislation, are protected against possible dangers generated by opaque IP

licensing terms. This legislation protects users adopting MPEG-G from being exposed to future

unexpected claims or restrictions on the usage of the technology licensed in conformity to the

ISO policy. Moreover, an International Standard guarantees long term maintenance and possible

improvements, while ensuring backward compatibility.

International Standards contributes benefits to end users by ensuring that end users:

 Are not locked into proprietary solutions, therefore can select a different technology

provider without changing the standard components of their own products.

 Will always be able to use and retrieve their data based on the open availability of the

standard specifications.

 Will be able to transparently share their data without the need to adapt them according to

the nature of the receiving device.

Regulators and governments count on ISO standards to help develop better regulation, knowing

they have a sound basis thanks to the involvement of ISO as governing entity supervising the

standards development process.

They make trade across international borders easier and promote global competition, having a

positive impact on economies. Standards provide consumers with confidence in the quality and

safety of products and services. In dong all of this, Standards impact communities and economies

across the globe. Looking at the impact to business only standards help organizations by:

1. Reducing Costs

Lowering costs through minimizing errors, redundancies and increasing productivity.

2. Efficiency 

Improving quality, and lead-time of products and service

3. Mitigating Risks

Identifying and mitigating risks within their business and supply chain

4. Consistency

Lowering research and development costs and improving speed to market by building on

previously standardized technology or systems.

5. Customer Confidence

Promoting acceptance of product or services into the marketplace by increasing customer

confidence in their safety and quality.

6. Uniformity

Providing uniformity of units of measurement, enabling accuracy and confidence in commercial

transactions locally and globally.

7. Eliminate Trade Borders

Helping products, services and staff move across trade borders, reducing technical barriers to

international trade

8. Universal Vendor Requirements

Improving supply chain management by establishing common requirements for all vendors to

comply with.

1.10 Limitations of International standards

A limitation of standards is they are not intended to endorse specific solutions, they just allow for

direct comparison of specific properties which have been identified by the standards committees

as being critical. This allows for apples-to-apples comparison of solutions, to better understand

how they may perform and potentially meet the client’s needs. The benefit of this performance

based approach is that it allows the manufacturers to continue to innovate; developing new

materials and techniques that give can give the measurable properties the client is seeking.

Standards don’t typically have pass/fail boundaries. For many of these tests, we know the

properties that are critical, but since an individual is so unique and has such specific and inherent

risks, challenges, or needs, it’s difficult to have fixed properties assigned to be a solution for

every person. Typically, the standards are used to help user to compare and contrast the

performance characteristics a client is looking for. Lastly, it’s important to note the standards and

testing are not at all intended to replace clinical reasoning. Standards are meant to be additional

tools that can be used in the decision-making process for the individual.

1.11 Conclusion

To sum up an international standard is a document that has been developed through the

consensus of experts from many countries and is approved and published by a globally

recognized body. It may be used either by direct application or by a process of modifying an

international standard to suit local conditions. International standards established by international

research organizations. Supreme Audit Institutions (SAIs) across the world are committed to
improving the quality of their work and progressively carrying out their audits using

international standards. Adopting international standards results in creating national standards

that are equivalent, or substantially the same as international standards in technical content.

Implementing international standards has its own steps and procedures and has its own

challenges. Standards can be set by different organizational boards such as IAASB, IAESB,

IESBA and IPSASB which is supported by the International Federation of Accountants (IFAC)

with their principles and guidance. They used to overcome technical barriers in international

commerce caused by differences among technical regulations and standards developed

independently and separately by each nation, national standards organization, or business.

Standards are not intended to endorse specific solutions.

International standards are used both in private and public sector to ensure investors, government

and the public sectors in the area of transparency, accountability, and credibility of information

in each activity or programs. Therefore, the use of globally accepted standards will simplify

benchmarking, regional quality assurance initiatives and peer reviews as well as the sharing of

experiences in other ways. Using similar audit methods in different countries can inspire

organizations to continuous improvement. Applying globally accepted standards will strengthen

the audit profession in general. High-quality international standards help promote the growth and

development of organizations of all sizes—from public interest entities to small- and medium-

sized entities.