Technical Hub

Users of financial reports are increasingly interested in the impact that climate-related matters have on a company's financial performance, as well as understanding the factors and initiatives that mitigate the effects of climate change. IAASA has today published an Information Note “Reporting Climate Change”. The Information Note may be accessed here.

In an update of our earlier news item, the Government has today published a draft Scheme of the Right to Request Remote Working Bill 2022.Under it an employee who has completed at least 26 weeks of continuous service can submit a request for remote working. The employer must give the request due consideration but may decline if the proposal requested is not suitable on business grounds. The draft legislation outlines 13 non-exhaustive potential business grounds for an employer to refuse the request. Refusals can be appealed to the Workplace Relations Commission. Every employer will be required to establish and maintain a written statement of remote working policy. The Tánaiste said today that he wanted the legislation published by Easter and passed by the Oireachtas by the summer recess.

The Government has recently published its legislative programme for the Spring Session 2022. Read the press release here and the contents of the programme here. Proposed legislation which may be of interest, all of which is on the Government’s priority list, includes the Right to Request Remote Work Bill and the Protected Disclosures (Amendment) Bill, which is required to transpose EU obligations. Also on the priority list are the Sick Leave Bill and the Central Bank (Individual Accountability Framework) Bill. The last three are some way advanced with heads of bill of each approved. Readers may be aware that Public Policy in the Institute has made representations to the DETE about the Sick Leave Bill. The latest correspondence is available here. Also on the agenda is another companies’ amendment bill. This is titled the Companies (Miscellaneous Provisions) Bill and is stated to provide for miscellaneous amendments to the Companies Act 2014.Others of possible interest are a Limited Partnership Bill to modernise the Limited Partnership Act 1907, a Cyber Security Bill and a Cybercrime Bill, a Personal Insolvency Amendment Bill and a Charities Amendment Bill.

Welcome to this week’s Technical Roundup.  In developments in recent weeks, IAASA has published a Consultation Paper on its proposals to adopt Standards for Investment Reporting (Ireland) (‘SIRs (Ireland)’); Accountancy Europe is calling for the European Union and its national governments to move to a sustainable and resilient economy as part of recovering from the pandemic. Read more on these and other developments that may be of interest to members below. Financial Reporting IAASA has published summary information of its financial reporting enforcement activities undertaken during 2021. The Snapshot document may be accessed here. The European Financial Reporting Advisory Group (EFRAG) have issued a summary report entitled “Targeted disclosure: what we learnt from the field test with European preparers”. The report summarises the results of fieldwork conducted by EFRAG and the IASB on the IASB Exposure Draft Disclosure Requirements in IFRS Standards - A Pilot Approach. The International Accounting Standards Board (IASB) has published an article on its Extractive Activities project. EFRAG has published its draft comment letter in response to the IASB's Exposure Draft ED/2021/10 Supplier Finance Arrangements and seeks constituents' views on the proposals. Comments on the draft comment letter are requested by 9 March 2022. Each year, the FRC carries out an annual review of FRS 101 to provide additional disclosure exemptions as IFRS evolves and to respond to stakeholder feedback about other possible improvements. In its 2021/2022 annual review of FRS 101 which is contained in FRED 79- FRS 101 Reduced Disclosure Framework- 2021/22 cycle, the FRC is proposing no amendment to FRS 101. The Institute has agreed with the proposal in its response to the consultation which runs until 1 March 2022. Sustainability Accountancy Europe is calling for the European Union and its national governments to move to a sustainable and resilient economy as part of recovering from the pandemic. Accountancy Europe has also issued its Sustainability January 2022 update. The IFRS Foundation Trustees have appointed Emmanuel Faber as Chair of the International Sustainability Standards Board. Audit IAASA has published a Consultation Paper on its proposals to adopt Standards for Investment Reporting (Ireland) (‘SIRs (Ireland)’). The proposed effective date of the SIRs (Ireland) is for reporting accountant engagements commencing on or after 15 September 2022. Responses are requested by Friday 15 April 2022. The FRC has published its 3-year Plan for 2022-25 which acknowledges the FRC’s continued commitment to being an effective and transparent regulator as it prepares to transition to the Audit, Reporting and Governance Authority. Insolvency At a recent meeting of the Eurogroup (see further below) Ministers had a discussion on the solvency situation of the corporate sector and potential measures to facilitate corporate restructuring and economic adjustment in the euro area in the recovery after the global COVID-19 pandemic. You can read the technical note to the group which gives insight into the view on policy support measures going forward including that the phasing-out of support measures should be accompanied by the adaptation of insolvency frameworks. Other Areas of Interest The Irish Charities Regulator recently published its third Statement of Strategy focussing on proportionate regulation and greater communication with charities and the public. It includes a new classification standard for charities and the provision of more support material and guidance to ensure that they are well-governed. You can read the press release here and the statement of strategy here. The Central Bank of Ireland issued a press release recently giving details of its commencement of  a public consultation on the application of the Minimum Competency Code 2017 and the Minimum Competency Regulations 2017 to credit union core services. The minimum competency standards were first introduced by the Central Bank on 1 January 2007 and established minimum professional standards for staff of financial service providers with particular emphasis on staff dealing with consumers in relation to retail financial products. The Minister for Finance Paschal Donohoe recently attended a meeting of Eurogroup of which he is president. Remarks he made following the meeting can be found here. Some of the matters discussed were economic adjustment and resilience in terms of recent performance of the euro area compared to international peers. You can read more about that here. They also discussed the draft European council recommendation on the economic policy of the euro area for 2022 and the solvency situation in the corporate sector (see above). The UK Government recently published its National Cyber Strategy 2022. The Minister introducing it stated that it will ensure that the UK remains confident, capable and resilient in the digital world and continues to adapt, innovate and invest in order to protect and promote UK interests in cyberspace. The strategy sets out 5 pillars to its framework with actions and outcomes intended to be achieved by 2025. The Irish Health and Safety Authority’s new Strategy Statement 2022 – 2024  and Programme of Work 2022 were launched recently. Readers may be interested in its stated key goals of its strategy statement of tackling current and emerging challenges and opportunities in Ireland’s workplaces including the introduction of remote/hybrid working, advancements in technology and the green economy, the ‘gig economy’, and the particular needs of vulnerable workers and migrant groups. The UK Financial Conduct Authority is strengthening its financial promotion rules for high risk investments, including crypto assets .It is  consulting on proposed changes to: its  classification of high-risk investments; the consumer journey into high-risk investments; strengthening the role of firms approving and communicating financial promotions; applying its financial promotion rules to qualifying cryptoassets. Click here for the FCA information page  and here for the consultation paper. The consultation closes on 23 March 2022. The Advisory Scientific Committee of the European Systemic Risk Board recently published its report on Digitalisation and the future of banking. The report considers how digitalisation may change the way financial services are provided in the future, identifying financial and non-financial risks and forming possible policy responses to them.

IAASA has published a Consultation Paper on its proposals to adopt Standards for Investment Reporting (Ireland) (‘SIRs (Ireland)’). SIR (Ireland) 1000 – Investment Reporting Standards Applicable to all Engagements in Connection with an Investment Circular SIR (Ireland) 2000 – Investment Reporting Standards Applicable to Public Reporting Engagements on Historical Financial Information SIR (Ireland) 3000 – Investment Reporting Standards Applicable to Public Reporting Engagements on Profit Forecasts SIR (Ireland) 4000 – Investment Reporting Standards Applicable to Public Reporting Engagements on Pro Forma Financial Information SIR (Ireland) 5000 – Investment Reporting Standards Applicable to Public Reporting Engagements on Financial Information Reconciliations under the Listing Rules SIR (Ireland) 6000 – Investment Reporting Standards Applicable to Public Reporting Engagements on Quantified Financial Benefits Statements The purpose of this consultation paper is to obtain the views of stakeholders with regard to IAASA’s proposals to adopt the SIRs (Ireland). The consultation paper is available here. The six proposed SIRs (Ireland) are available here. The proposed effective date of the SIRs (Ireland) is for reporting accountant engagements commencing on or after 15 September 2022.  IAASA has prepared a short information video which is available here. Stakeholders and interested parties are invited to provide responses  to submissions@iaasa.ie no later than 5pm on Friday 15 April 2022.

The Financial Reporting Technical Committee of Chartered Accountants Ireland has responded to IASB Exposure Draft ED/2021/3: Disclosure Requirements in IFRS Standards—A Pilot Approach. The IASB, who are responsible for developing and approving International Financial Reporting Standards (IFRSs), issued the exposure draft as part of an ongoing project to address concerns that stakeholders have raised with the IASB that are often collectively referred to as the 'disclosure problem'. These concerns are that financial statement disclosures will sometimes contain; Not enough relevant information; Too much irrelevant information; and Ineffective communication of the information provided The Exposure Draft included guidance on developing and drafting disclosure requirements in IFRS standards in future and applied this proposed guidance to develop proposed amendments to the disclosure sections of IFRS 13- Fair Value Measurement and IAS 19- Employee Benefits. The objective of the project is to improve how the Board develops and drafts disclosure requirements in IFRS Standards, so that entities applying those requirements provide more useful information to users of financial statements. The Exposure Draft proposed a reduction in the number of specified mandatory disclosures and a greater focus on objective-based disclosures in IFRS standards. While the committee supported the IASB's ongoing efforts to address the 'disclosure problem', their response raised some concerns with the approach outlined in the exposure draft. These concerns include; That a reduction in the number of specified disclosures in IFRS standards will lead to increased subjectivity in preparing financial statements which will potentially result in reduced comparability between entities. The description of some disclosures as "not mandatory" may be seen as an invitation to make less disclosure and may widen the gap between what preparers and other stakeholders consider to be material for disclosure. The proposed amendments would increase enforcement challenges, be burdensome for preparers and increase reliance on materiality judgements. The committee supported the use of overall and specific disclosure objectives within the individual standards but without the minimum level of mandatory disclosures proposed in the Exposure Draft.