IFAC (International Federation of Accountants)

What is IFAC (International Federation of Accountants)?

IFAC operates as an umbrella body. It does not draft ISA standards or ethical codes directly. Instead, it provides funding, governance oversight, and logistical support to four independent boards: the International Auditing and Assurance Standards Board (IAASB), the International Ethics Standards Board for Accountants (IESBA), the International Public Sector Accounting Standards Board (IPSASB), and the International Accounting Education Standards Board (IAESB). The Monitoring Group (composed of IOSCO, the Basel Committee, the World Bank, and others) oversees IFAC's public interest responsibilities.

For a European non-Big 4 firm, IFAC's practical relevance flows through one channel: the standards its boards produce. When the IAASB finalises a new or revised ISA (such as ISA 240 Revised, effective for periods beginning on or after 15 December 2026), national bodies transpose it into local requirements. In the Netherlands, the NBA adopts ISAs through NV COS. In Germany, the IDW maps ISAs into its own pronouncements. The firm never interacts with IFAC directly, but every engagement file rests on IFAC-supported standards.

IFAC's Statements of Membership Obligations (SMOs) require each member body to use best endeavours to adopt international standards and to maintain quality management systems consistent with ISQM 1. Non-compliance is not theoretical: IFAC's Compliance Advisory Panel reviews member bodies on a rolling cycle and can recommend suspension.

Worked example: Dupont Ingenierie S.A.S.

Client: French engineering services company, FY2025, revenue EUR 92M, IFRS reporter. The engagement partner at a mid-tier Paris firm is finalising the 2025 audit plan and needs to trace the authority chain from the firm's methodology to the underlying international standards.

Step 1 — Identify the applicable standards

The firm's methodology is based on ISAs as adopted in France. The Compagnie Nationale des Commissaires aux Comptes (CNCC) adopts ISAs issued by the IAASB (an IFAC-supported board). For the Dupont engagement, the relevant standards include ISA 315 (Revised 2019) for risk assessment and ISA 540 (Revised) for accounting estimates.

Documentation note: record in the planning memorandum that the engagement follows ISAs as adopted by the CNCC, and note the effective versions of each standard applied. This establishes the regulatory basis for the audit per ISA 200.19.

Step 2 — Confirm ethical requirements

The firm applies the IESBA Code of Ethics as adopted by the CNCC. IFAC's SMO 4 requires the CNCC (as an IFAC member body) to use best endeavours to adopt the IESBA Code. The engagement partner confirms independence under Part 4A of the Code for the Dupont engagement, including the EUR 14,200 fee dependency analysis (total audit fees representing 11.2% of the office's revenue, below the 15% threshold requiring safeguards under IESBA Code R410.4).

Documentation note: record the independence assessment, the fee calculation, and the reference to IESBA Code R410.4. Attach the firm's annual independence declaration for the Dupont client.

Step 3 — Link quality management to ISQM 1

The firm's quality management system is designed to comply with ISQM 1 (issued by the IAASB, supported by IFAC). The engagement quality reviewer checks that the Dupont file adheres to the firm's response to identified quality risks under ISQM 1.16(c), including the risk that engagement teams do not apply current standard versions.

Documentation note: reference the firm's quality management policies and the engagement quality review checklist. Cross-reference the ISQM 1 quality objective that addresses engagement performance (ISQM 1.30-31).

Step 4 — Address standard transitions

ISA 240 (Revised) becomes effective for audits of financial statements for periods beginning on or after 15 December 2026. For the FY2025 audit (period ending 31 December 2025), the current ISA 240 still applies. The engagement partner notes the upcoming transition in the file and confirms the firm's training schedule aligns with the new standard's effective date.

Documentation note: record the version of ISA 240 applied (current, not Revised) and note the planned transition date. Attach the firm's standard-transition monitoring log.

Conclusion: the planning memorandum for Dupont traces a clear line from IFAC's governance structure through the IAASB and IESBA to the specific standards applied on the engagement, which is defensible because each link in the chain is documented with the applicable paragraph reference.

Why it matters in practice

• Engagement files frequently cite "ISA 315" without specifying whether the Revised 2019 version applies. Because IFAC-supported boards issue revised standards that coexist with prior versions during transition periods, the file must identify the exact version in force. ISA 200.19 requires the auditor to comply with ISAs that are relevant to the audit, and the engagement letter should state which version set the firm follows.
• Smaller firms sometimes treat IFAC membership obligations as relevant only to their national professional body, overlooking the downstream effect. When the NBA or CNCC updates its standards in response to an IFAC SMO review cycle, local requirements can change mid-year. Firms that do not monitor their national body's IFAC compliance correspondence risk applying outdated methodology on active engagements.

IFAC vs. IAASB

The distinction matters on engagements when an inspection reviewer asks which body issued a standard the firm cites. Attributing ISA 315 to "IFAC" is technically inaccurate. The IAASB issued it. IFAC supported the process.

Related terms

Frequently asked questions