The Professional Accountants in Business (PAIB) Committee met in New York on October 2-4, 2006. This summary is for information purposes and addresses the current state of discussions on projects, which might change after further deliberation.

IFAC KnowledgeNet

A live demonstration of IFACnet – A KnowledgeNet for Accountants in Business ( took place at the beginning of the meeting. IFAC Chief Executive Ian Ball and Chief Communications Officer Helene Kennedy attended this session, and Ms. Kennedy provided the committee with an update on communications and marketing activities to promote the launch of IFACnet and to support participating member bodies in announcing the launch. Committee members provided reports on their member body’s participating in IFACnet and efforts to promote this new service to individual members.

The committee also discussed the planned expansion of IFACnet and the addition of other member bodies’ resources. A further six member bodies and two regional bodies will be invited to join the current participants in the coming weeks with more planned before the end of the year.

PAIB Committee Pronouncements

The committee agreed to a long-term work program based on developing principles-based pronouncements. An overarching framework of International Management Accounting Principles, which will be developed over time, will provide a framework for two planned document types:

  • International Management Accounting Statements (IMAS) relating to core management accounting topics. IMAS will determine a body of knowledge for management accounting and financial management; and
  • PAIB Principles-Based Good Practice Guidance covering topics that involve the professional accountant in business (PAIB) in a multi-disciplinary team in which a PAIB might lead, but does not own the knowledge domain.

In developing these publications, the committee will continue to evaluate the titles and branding of these document types to ensure relevance to professional accountants in business.

An explanatory memorandum including a proposed preface documentwill be exposed early in 2007 for public comment signaling IFAC’s aims and objectives in delivering this program, and providing detail on scope, authority and due process. Principles-Based Good Practice Guidance on Defining and Developing a Code of Conductwill be launched at the World Congress of Accountants to support the workshop chaired by Bill Connell on the PAIB and corporate ethical behavior.

Risk Management and Internal Controls

The committee discussed the development of a new paper on internal control, Learning from Successes, which will include interviews of managers in organizations that have embodied good practice in risk management and internal control so it is integrated and embedded into management processes. This will be particularly apt at a time when internal control practice is in danger of losing credibility from overregulation and widespread bad practice.

Sustainability

The committee discussed its three-year sustainability action plan and agreed to revised it in light of the two information papers published this year to help PAIBs understand the importance of sustainability and to provide good practice examples and role models to encourage a more active participation. Two key aspects to our discussions are a) the scope and potential topic selection for principles-based guidance, and b) the possible integration of this topic into other areas of committee projects. For example, sustainability management accounting and full cost accounting could be absorbed by IMAS related to costing. Another example is risk management and internal control related to sustainability issues could be embedded into overall management processes.

Public Sector Considerations

The committee approved a scoping project to establish performance measurement structures in the public sector. The research would collect examples of the way in which public sector performance is assessed, monitored and reported in a wide range of jurisdictions. This could help to identify specific public sector considerations in the work of the committee generally and in relation to IMAS and PAIB Principles-Based Good Practice Guidance.

Medium-sized Entity Considerations

The committee agreed to publishits study into the behaviors and characteristics of a typical medium-sized organization.These will be categorized, for example into financial, governance, work force, customer, processes and strategic considerations. The proposed publication will also use interviews of CFOs/Finance Directorsof medium-sized entities to identify burning platforms and to establish how they have worked their way to dealing with the important issues facing medium-sized entities and to understand better their perspective on organization evolution. This should provide the groundwork to the committee’s discussions on the potential service requirements in this sectorand determine particular considerations and points of interest in producing International Management Accounting Statements and Principles-Based Good Practice Guidance.

Date of Next Meeting

The next PAIB Committee meeting will be held on March 26-28,2007 and will be hosted by the Royal Nivra in Amsterdam.