Public Interest Oversight Board
Encyclopedia
The Public Interest Oversight Board is an international body that oversees the International Federation of Accountants
(IFAC) and seeks to improve the quality and public interest focus of the IFAC standards in the areas of audit, education, and ethics.
and WorldCom in the United States
and of Parmalat
in Europe. These undermined public confidence in the conduct and competence of audit practitioners, leading to demand for an overhaul of the IFAC including an independent oversight body to ensure that all standards are in the public interest.
The board was established through a collaborative effort by members of the international financial regulatory community, working with IFAC, led by Michel Prada
, Chairman of the French Financial Markets Authority and Deputy Chairman of the International Organization of Securities Commissions
(IOSCO) Technical Committee.
The first chairman was Stavros Thomadakis
, a Professor of Finance at the University of Athens who was formerly chairman of the Hellenic Capital Market Commission
.
The new board was welcomed by regulatory bodies such as the Financial Reporting Council
(FRC) of the United Kingdom
.
(IAASB), the International Accounting Education Standards Board (IAESB) and the International Ethics Standards Board for Accountants
(IESBA). The PIOB also oversees the IFAC's Compliance Advisory Panel, which evaluates member body compliance with the IFAC membership rules.
The Chair of the PIOB has the right to attend and to speak at IFAC Board meetings.
, the Basel Committee on Banking Supervision
, the International Association of Insurance Supervisors
, the World Bank
, the European Commission
and the Financial Stability Board
.
The first four organizations nominate the eight members of the board, while the European Commission nominates two observers to the board.
International Federation of Accountants
International Federation of Accountants is the global organization for the accountancy profession. IFAC has 164 member and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants employed in public practice, industry and commerce, government, and academe...
(IFAC) and seeks to improve the quality and public interest focus of the IFAC standards in the areas of audit, education, and ethics.
Formation
Creation of the PIOB in 2005 was triggered by a series of corporate scandals including the collapse of EnronEnron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
and WorldCom in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and of Parmalat
Parmalat
Parmalat SpA is a multinational Italian dairy and food corporation. Having become the leading global company in the production of ultra high temperature milk, the company collapsed in 2003 with a €14 billion hole in its accounts in what remains Europe's biggest bankruptcy...
in Europe. These undermined public confidence in the conduct and competence of audit practitioners, leading to demand for an overhaul of the IFAC including an independent oversight body to ensure that all standards are in the public interest.
The board was established through a collaborative effort by members of the international financial regulatory community, working with IFAC, led by Michel Prada
Michel Prada
Michel Prada is a lawyer and administrator who became a French civil servant, holding a number of senior positions.-Background:Prada was born on 2 April 1940 in Bordeaux....
, Chairman of the French Financial Markets Authority and Deputy Chairman of the International Organization of Securities Commissions
International Organization of Securities Commissions
The International Organization of Securities Commissions is an association of organisations that regulate the world’s securities and futures markets....
(IOSCO) Technical Committee.
The first chairman was Stavros Thomadakis
Stavros Thomadakis
Stavros Thomadakis is a Greek economist who served as chairman of the Hellenic Capital Market Commission, Professor of Finance at the University of Athens and chairman of the Public Interest Oversight Board.-Academic career:...
, a Professor of Finance at the University of Athens who was formerly chairman of the Hellenic Capital Market Commission
Hellenic Capital Market Commission
The Hellenic Republic Capital Market Commission is one of two regulatory bodies for the financial industry in Greece, the other being the Bank of Greece....
.
The new board was welcomed by regulatory bodies such as the Financial Reporting Council
Financial Reporting Council
The Financial Reporting Council is the UK's independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.-Structure:...
(FRC) of the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
.
Activities
The PIOB oversees the public interest activities of three standard-setting boards in the IFAC: the International Auditing and Assurance Standards BoardInternational Auditing and Assurance Standards Board
The International Auditing and Assurance Standards Board is the independent standard setting body which issue auditing, review, other assurance related services and quality control standards to be applied by the global auditing profession...
(IAASB), the International Accounting Education Standards Board (IAESB) and the International Ethics Standards Board for Accountants
International Ethics Standards Board for Accountants
The International Ethics Standards Board for Accountants develops and promotes ethical standards and guidance for professional accountants...
(IESBA). The PIOB also oversees the IFAC's Compliance Advisory Panel, which evaluates member body compliance with the IFAC membership rules.
The Chair of the PIOB has the right to attend and to speak at IFAC Board meetings.
Oversight
The PIOB is accountable to the Monitoring Group, which is composed of the International Organization of Securities CommissionsInternational Organization of Securities Commissions
The International Organization of Securities Commissions is an association of organisations that regulate the world’s securities and futures markets....
, the Basel Committee on Banking Supervision
Basel Committee on Banking Supervision
The Basel Committee on Banking Supervision is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1975. It provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance...
, the International Association of Insurance Supervisors
International Association of Insurance Supervisors
The International Association of Insurance Supervisors is an international organisation that brings together the world's insurance supervisors and regulators.-History:The IAIS was created in 1994...
, the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
and the Financial Stability Board
Financial Stability Board
The Financial Stability Board is an international body that monitors and makes recommendations about the global financial system. It was established after the 2009 G-20 London summit in April 2009 as a successor to the Financial Stability Forum. The Board includes all G-20 major economies, FSF...
.
The first four organizations nominate the eight members of the board, while the European Commission nominates two observers to the board.