Technical resource centre

Welcome to this week’s Technical Roundup. In developments this week, the European Central Bank recently issued its staff opinion on the first set of European Sustainability Reporting Standards; the Institute is hosting a webinar on Options for directors in financial difficulty on Thursday, 9 February 2023. We will outline directors’ duties and obligations when a business is in financial difficulty, and possible consequences for directors for not adhering to those duties and obligations. Read more on these and other developments that may be of interest to members below. Financial Reporting The European Financial Reporting Advisory Group (EFRAG) has published its Draft Comment Letter in response to the IASB's Exposure Draft 2023/1 International Tax Reform - Pillar Two Model Rules (Proposed Amendments to IAS 12). Comments are requested by EFRAG by 27 February 2023. The UK Endorsement Board is holding a roundtable in relation to the above Exposure Draft. This will take place on 13 January. EFRAG has completed its due process regarding Lease liability in a Sale and Leaseback (Amendments to IFRS 16) and has submitted its Endorsement Advice Letter to the European Commission. The International Accounting Standards Board (IASB) has published its January 2023 update and updated work plan. The IASB has issued an “In Brief” article to explain two decisions that have been made in the Business Combinations – Disclosures, Goodwill and Impairment project. The IFRS Foundation has issued its January 2023 update and the IASB has also issued its January 2023 podcast. Auditing The Financial Reporting Council (FRC) has updated its Statement of Intent on Environmental, Social and Governance (ESG) reporting. This was first published in 2021, and identified underlying issues with the production, audit and assurance, distribution, consumption, supervision and regulation of ESG information. Since then, it has undertaken a significant number of initiatives both in the UK and internationally, to assist and support its wide range of stakeholders and drive best practice in high-quality and comparable ESG reporting and disclosure. Sustainability The Irish Dept of Enterprise Trade and Employment has issued a public consultation seeking the views of interested parties on the member state options in the Corporate Sustainability Reporting Directive (“Directive”). More details can be found here and you can access the consultation here. Even though it is not consulting on direct effect/mandatory provisions, comments and questions on all aspects of the Directive are invited to facilitate the Dept’s work in transposition. The consultation is open until 5 pm Thu 9 March 2023. Click here for a recent Institute news item with some more information on the Directive. Readers may also be interested in accessing the speakers’ PowerPoint slides from a recent DETE webinar on the Directive to get further information on the various presentations made. There was a presentation from DETE, PWC and EFRAG on the Directive (the CSRD Directive) and a presentation by DETE on a Proposal for a Directive on Corporate Sustainability Due Diligence. The European Central Bank recently issued its staff opinion on the first set of European Sustainability Reporting Standards.   You can read more on it by following the above link. Insolvency The Institute is hosting a webinar on Options for directors in financial difficulty on Thursday, 9 February 2023. We will outline directors’ duties and obligations when a business is in financial difficulty, and possible consequences for directors for not adhering to those duties and obligations. There will be discussion on the recent insolvency related changes to Companies Act 2014 on the expansion of directors’ duties. Anti-money laundering FATF recently issued its Annual Report 2021-2022. It sets out FATF achievements for the year including a strengthened standard on beneficial ownership: to prevent criminals from laundering dirty money through shell companies and other legal persons. A report and webinar on migrant smuggling that set out the most common methods used to transfer and launder the proceeds of migrant smuggling and new and updated guidance in a report that aims to help real estate sector professionals. You can read more and download  the FATF Annual Report 2021-2022 here . The NCA in the UK has recently issued some new publications on SARs including guides on the new SAR Portal Overview, the new SAR Portal FAQs and new SAR Portal- how to register. Please click here to go to the NCA Money laundering and illicit finance webpage where you will find links to the guides (on the right of the page). Other Areas of Interest The Irish Charities Regulator recently published new guidance entitled guidance for charities on crisis management,  guidance for small charities  and guidance document – Credit Card Controls for Charities. It also has a range of other guidance on its website which readers may find useful. The Corporate Enforcement Authority’s Director of Governance & Support Operations, Sharon Sterritt, will be speaking on the topic of 'The Role of the Forensic Accountant in Criminal Investigations' at the La Touche Training Regulatory Investigations conference on 9-10 March 2023. Further details are available at here. The Irish Competition and Consumer Protection Commission recently participated in EU-wide sweep of websites to identify “dark patterns” which are practices aimed at pushing consumers into making choices online that may not be in their best interest. Examples are fake countdown timers; web interfaces designed to lead consumers to purchases, subscriptions or other choices; and hidden information. Sweeps included websites of mainly EU-based traders selling clothing; electronic goods and household equipment; cosmetics and personal care goods and food. The CCPC inspected the Irish websites of 16 well-known high street retailers. It said that in an Irish context, from the select number of Irish traders reviewed, no clear infringements were identified. You can read more on the CCPC website here and the European Commission press corner here. Did you know that businesses have rights when engaging with online platforms? EU Regulation 2019/1150 (the ‘P2B Regulation’) aims to provide a fair, transparent and predictable business environment for businesses who use online platforms to offer their goods or services to consumers. You can read more about the P2B Regulation here. The CCPC recently engaged with businesses who use online platforms to sell their products and services to consumers. It found that many businesses have experienced difficulties. The most common issues were a difficulty lodging a complaint with the platform, and difficulty resolving a complaint through the platform’s complaint-handling system. You can read more about the engagement process and results here. For further technical information and updates please visit the Technical Hub on the Institute website.  

Following on from its webinar on the Corporate Sustainability Reporting Directive (CSRD) it held last week, the Department of Enterprise, Trade and Employment (DETE) has this week issued a public consultation seeking the views of interested parties on the member state options in the CSRD. More details can be found here and you can access the consultation here. Even though it is not consulting on direct effect/mandatory provisions, comments and questions on all aspects of the CSRD are invited to facilitate DETE’s work in the transposition of the CSRD. The consultation is open until 5pm on Thursday 9 March 2023. For reader’s information, the CSRD is a European directive requiring certain companies to disclose information on sustainability-related information. The directive aims to modernise and strengthen the rules about the type of social and environmental information that companies will have to report. The CSRD envisages the adoption of European Sustainability Reporting Standards which seek to ensure that investors and other stakeholders have access to the information they need to assess investment risks arising from climate change and other sustainability issues. They seek to create a culture of transparency about the impact of companies on people and the environment. The CSRD was approved by the European Parliament and the EU Council in late 2022 and was published in the EU Official Journal on 16 December. Following this publication, EU member states have 18 months to transpose the directive into their own national laws. Finally, readers may also be interested in accessing the speakers’ PowerPoint slides from the DETE webinar to get further information on the various presentations made. There was a presentation from DETE, PWC and EFRAG on the CSRD and a presentation by DETE on a Proposal for a Directive on Corporate Sustainability Due Diligence.

IAASA has published its latest Compendium of Financial Reporting Decisions. This compendium is published with the aim of assisting preparers to prepare high quality financial reports. In the compendium, IAASA has published decisions relating to accounting treatments applied by three companies in their 2021 annual reports. While also addressing accounting treatments applied under various accounting standards, the publication raises, for the first time, some financial reporting decisions relating to climate change and sustainability matters.

Welcome to this week’s Technical Roundup. In developments this week, as part of its ongoing engagement activities in relation to the periodic review of FRS 102 and other FRSs, the Financial Reporting Council hosted a webinar on 19 January which gave an overview of the proposals and provided further context in relation to the decisions made; the Chairperson of the European Banking Authority recently gave a speech on Financing transition to sustainability? What is the role of banking regulation? He said that the financial sector has an important role to play, both in terms of financing the transition to sustainability and for managing financial risks stemming from ESG factors. Read more on these and other developments that may be of interest to members below. Financial Reporting IAASA has published a compendium of financial reporting decisions. These decisions relate to accounting treatments applied by three companies in their 2021 annual financial reports. This compendium, for the first time, includes decisions covering accounting for climate change and sustainability initiatives. As part of its ongoing engagement activities in relation to the periodic review of FRS 102 and other FRSs, the FRC hosted a webinar on 19 January which gave an overview of the proposals and provided further context in relation to the decisions made. The Financial Reporting Council (FRC) are hosting a webinar on 31 January entitled “ESG – what we’ve achieved so far and what’s next” The IASB have released a webcast which addresses the proposals on financial instruments contained in the recent Exposure Draft on the Third Edition of the IFRS for SMEs Accounting Standard. In its Q4 2022 podcast the IFRS Interpretations Committee discussed a recent submission in relation to IFRS 16 relating to whether a contract including a substitution right contains a lease. The tentative agenda decision in relation to this is open for comment until 6 February 2023. In its sixth episode of “The Fast Future with IFAC” podcast series, some issues relevant to small and medium practitioners are discussed, including cybersecurity, cloud computing, client relationship-building, attracting and retaining talent and firm innovation. Auditing The IAASB has opened its public consultation for a group audit-specific section of the proposed auditing standard for less complex entities. This is open for public comment until 2 May. Sustainability The Chairperson of the European Banking Authority recently gave a speech on Financing transition to sustainability? What is the role of banking regulation? He said that the financial sector has an important role to play, both in terms of financing the transition to sustainability and for managing financial risks stemming from ESG factors. There was some discussion on the EBA roadmap which was adopted in December 2022 and that EBA are going to continue working to embed ESG considerations into their risk analysis and stress testing. Professional Accountancy Education Europe (PAEE), which is a collaboration between European accountancy bodies striving to provide a high-quality education framework at international level have issued some Q&As which explain why it is vital to further develop sustainability awareness among accountancy and auditing professionals. The International Sustainability Standards Board (ISSB) have issued their January 2023 update and podcast. This discusses recent developments including the rollout and adoption of Sustainability Standards S1 and S2. Insolvency The Institute is hosting a webinar on Options for directors’ in financial difficulty on Thursday, 9 February 2023. We will outline directors’ duties and obligations when a business is in financial difficulty, and possible consequences for directors for not adhering to those duties and obligations. There will be discussion on the recent insolvency related changes to Companies Act 2014 on the expansion of directors’ duties. Anti-money laundering The Irish Minister for Justice, with the consent of the Minister for Finance recently issued Guidelines under section 37(12) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) (Act) giving a bit more detail of  those functions in the State that may be considered to be prominent public functions for the purposes of the Act. This will assist firms to identify domestic Politically Exposed Persons (PEPs) when conducting their AML risk assessment. The UKFIU recently published the 2022 Suspicious Activity Reports (SARs) Annual Report and annexes which features statistics covering the years 2020-21 and 2021-22.SARs are submitted to the NCA by individuals working in regulated sectors such as banking, legal and financial services, where they suspect that transactions are being used to launder money or conceal criminal activity. Click here for a news item on the report. Other Areas of Interest The Irish Central Bank recently issued a Dear CEO letter concerning its supervisory findings and expectations for payment and electronic money (E-Money) firms. The purpose of the letter is to reaffirm supervisory expectations of CBI with the CBI stating that the supervision of all financial services sectors is risk-based. The letter also sets out a requirement that all payment and e-money firms who are required to safeguard users’ funds obtain a specific audit of their compliance with the safeguarding requirements under EU regulations and the letter sets out what CBI expects the audit opinion to contain. Read the full letter at the link above . Also, in CBI news the Governor recently issued a letter setting out his financial regulation priorities 2023.Among other items it includes continuing progress on actions on the systemic risks generated by non -banks and ensuring that the EU’s Anti Money Laundering Action Plan including the establishment of a single supervisory authority results in  a consistent and robust EU wide framework. The DETE webinar on the Corporate Sustainability Reporting Directive (CSRD)was held on 26 January 2023.The purpose of the webinar was to introduce CSRD and the European Sustainability Reporting Standards arising out of it, to Irish businesses so that they can begin their preparations. DETE reported that next week will see the launch of a public consultation on member state options contained within the CSRD. Further news on the webinar can be found here. For further technical information and updates please visit the Technical Hub on the Institute website.  

The Minister for Justice, with the consent of the Minister for Finance, has issued Guidelines under section 37(12) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) clarifying those functions in the State that may be considered to be prominent public functions for the purposes of the Act. This will assist firms to identify domestic Politically Exposed Persons (PEPs) when conducting their risk assessment.

Readers may be aware that the Protected Disclosures (Amendment) Act 2022 which amended the Protected Disclosures Act 2014 was commenced on 1 January 2023. The Irish Law Reform Commission (LRC) has now finalised a very useful administrative consolidation of the Protected Disclosures Act 2014 updated to 1 January 2023, incorporating all the Protected Disclosures (Amendment) Act 2022 amendments. The consolidation can be found on the LRC website at the above link.   This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.

Welcome to this week’s Technical Roundup.  In developments this week, the IDA in Ireland has issued its monthly e-zine which includes a report of ‘green talent’ on the rise and seven offshore renewables projects given a boost by the Irish Government; the Financial Reporting Council held a webinar on 19 January setting out the proposals contained in FRED 82 Draft amendments to FRS 102 The Financial reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review. Read more on these and other developments that may be of interest to members below. Financial Reporting The International Sustainability Standards Board (ISSB) are planning to hold a series of webinars on corporate reporting. The series, which commences on 24 January, will offer a deep dive into the ISSB proposed standards and will consist of three parts as follows. Part 1: Better information for better decisions—Introduction to investor-focused sustainability disclosure Part 2: Any size or stage—Getting started on climate disclosure Part 3: Connectivity and controls—the path to investor-grade disclosure The FRC held a webinar on 19 January setting out the proposals contained in FRED 82 Draft amendments to FRS 102 The Financial reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review. Auditing A new publication from Accountancy Europe builds on the factsheet published last year and offers constructive recommendations based on the discussions with their members’ audit experts as well as external stakeholders involved in developing AQI initiatives in their respective jurisdictions. Sustainability The IDA in Ireland has issued its monthly e-zine which you can click here to read. It includes a report of ‘green talent’ on the rise and seven offshore renewables projects given a boost by the Irish Government. Insolvency In December 2022, the Bankruptcy Master for Northern Ireland advised that the restriction on filing new creditors' winding up petitions is likely to be lifted in the new term. The court has advised that further information will be issued in advance of the new guidance. The court noted that lifting the restrictions may bring about some logistical challenges which is further hampered by the absence of the new proposed Insolvency (Amendment) Rules (Northern Ireland) 2022 and has encouraged a collaborative approach between all practitioners and the court. The Institute is hosting a webinar on Options for directors’ in financial difficulty on Thursday, 9 February 2023. We will outline directors’ duties and obligations when a business is in financial difficulty, and possible consequences for directors for not adhering to those duties and obligations. There will be discussion on the recent insolvency related changes to Companies Act 2014 on the expansion of directors’ duties. Other Areas of Interest The Irish Dept of Enterprise Trade and Employment (DETE) recently published its January 2023 Enterprise newsletter. It includes information on topics such as the webinar DETE are hosting on Thursday 26 January 2022 between 10am - 12pm to explain the new Corporate Sustainability Reporting Directive and accompanying standards in more detail. It also includes information on tariff suspension/quota schemes with the deadline for applications at 5.30pm on Tuesday, 31 January 2023. It also gives information on changes to the employment permit system to address skills shortages in Ireland’s Dairy, Transport and Home Care sectors. In relation to the DETE webinar readers are reminded to click here for the contact details in relation to registration for the webinar and to read the news item. DETE has advertised that there will be presentations from the officials heading up the transposition of the directive within the Department of Enterprise, Trade & Employment, the European Financial Reporting Advisory Group (EFRAG) and the EU Commission on the day of the webinar. The Irish government has recently published its legislation programme for Spring 2023. Click here for the press release and to access the spring legislative programme. Some particular items of interest are as follows: In the programme pre legislative scrutiny has taken place on the Charities (Amendment) Bill and it is now on the priority publication list. There is a heads in preparation of an Equality Acts (Amendment) Bill 2023 stated to make provision for proposed amendments to the equality legislation arising from the review of the Equality Acts. Readers may recall previous government agenda where a limited partnership Bill was proposed to modernise the Limited Partnership Act 1907.In the spring 2023 programme there is a heads in preparation of a Miscellaneous Provisions (Transparency and Registration of Limited Partnerships and Business Names) Bill 2023. This is stated to be to reform the Limited Partnerships Act 1907 and the Registration of Business Names Act 1963, strengthening Ireland’s regulatory framework and responding to concerns raised in relation to the transparency of limited partnerships. The Co-operative Societies bill is on the agenda as heads in preparation. Readers may recall that earlier this year, the Institute, as part of CCAB-I, responded to a public consultation from the Dept of Enterprise, Trade and Employment on new legislation for the co-operative sector and in November 2022 we brought you a news item that the Government had approved the drafting of what is billed as ground-breaking legislation for the sector. Here is the link to page giving details of the General Scheme of the Co-operative Societies Bill 2022. On this quarter’s legislative agenda work is still underway on the Companies (Administrative, Governance & Insolvency Amendment) Bill and it is stated to give effect to outstanding Programme for Government commitments on rights of workers as creditors; trading entities splitting operations; and transactional avoidance. One last bill which might be of interest is the Licencing of Construction Activity Bill which is stated to be to provide for the establishment of a statutory licensing system for construction and related activities. The Dept of Justice has recently published its 2021 Annual Report. They report that publication of  a Justice Climate Policy Statement setting out how the justice sector will reach its ambitious climate and energy efficiency targets, including by the adoption of green public procurement has been carried over to Justice Plan 2022. On the anti-money laundering front it is reported for example that 2021 inspections comprised 106 inspections of High Value Goods Dealers; 138 inspections of Trust or Company Service Providers; 23 inspections of notaries; 8 inspections of gambling providers and 5 inspections of Tax Advisors/ External Accountants. For further technical information and updates please visit the Technical Hub on the Institute website.

A new publication from Accountancy Europe builds on the factsheet published last year and offers constructive recommendations based on the discussions with their members’ audit experts as well as external stakeholders involved in developing AQI initiatives in their respective jurisdictions. The paper highlights the key considerations for developing and using AQIs to support potential debates that could take place among the European Commission, the Committee of European Audit Oversight Bodies (CEAOB), national policymakers and regulators, auditors, as well as other parties. Accountancy Europe want to keep contributing to this debate; since the evolution of AQI reporting as a means to support audit quality requires continuous discussion with all relevant stakeholders. To support this objective and build on the factsheet (May 2022), this publication: defines key concepts related to audit quality presents considerations for developing Audit Quality Indicators (AQIs) explains what can and cannot be achieved by AQI reporting AQIs are not ends themselves but are one important means to increase the audit work’s transparency and to support consistent, high-quality audits. A blend of AQIs can help focus on the areas where improvement is needed. Key factors to develop and use audit quality indicators - Accountancy Europe

In developments this week, the International Auditing and Assurance Standards Board (IAASB) has issued a public consultation for its 2024-2027 proposed strategy and work plan; the Department of Enterprise Trade and Employment has announced that it will hold a webinar on 26 January 2023 (10am-12pm) to inform stakeholders of the new requirements and standards in the Corporate Sustainability Reporting Directive and accompanying standards. Read more on these and other developments that may be of interest to members below. Financial Reporting The FRC are holding a webinar on 19 January on its recently released Exposure Draft “FRED 82”, which sets out the FRC’s Draft amendments to FRS 102 proposed as part of the periodic review of the standard. In its recently released Exposure Draft, the IASB has proposed a temporary exception in relation to accounting for deferred tax arising from the implementation of the OECD Pillar Two model rules. Comments are requested by the IASB by 10 March 2023. The UK Endorsement Board (UKEB) has published a Draft Endorsement Criteria Assessment (DECA) on Lease Liability in a Sale and Leaseback —Amendments to IFRS 16 (the Amendments) issued by the International Accounting Standards Board (IASB) in September 2022. These amendments add requirements explaining how a seller-lessee subsequently accounts for sale and leaseback transactions with variable lease payments that do not depend on an index or rate. Auditing The International Auditing and Assurance Standards Board (IAASB) has issued a public consultation for its 2024-2027 proposed strategy and work plan. The strategy seeks to accelerate the actions originally laid out in the 2020-2023 strategy with a focus on standard setting that supports the performance of high-quality audit and assurance engagements. Sustainability In its latest podcast, the International Sustainability Standards Board (ISSB) discuss recent decisions and discussions from the ISSB meeting in December. The Department of Enterprise Trade and Employment (DETE) has announced that it will hold a webinar on 26 January 2023 (10am-12pm) to inform stakeholders of the new requirements and standards in the Corporate Sustainability Reporting Directive and accompanying standards. Please click here to read the news item and for the contact details in relation to registration. DETE also says that a public consultation will be launched seeking views to inform Ireland’s transposition of the discretionary options of the Directive into national law. While acknowledging that it is a US report, in the light of ongoing developments in sustainability, readers might be interested in the Climate Action Report released by the Board of Governors of the Federal Reserve System recently. This report reviews the climate action plans of global systemically important banks (“G-SIBs”) and summarizes the progress they are making toward achieving them. Click here to access the website of Board of Governors of the Federal Reserve System and here to access the full paper. An abstract from the report states that despite some progress by large global banks to address climate change considerations, much work lies ahead to properly measure and disclose climate-related risks, and to better align financing activities with their net-zero targets. Insolvency The Institute is hosting a webinar on Options for directors’ in financial difficulty on Thursday, 9 February 2023. We will outline directors’ duties and obligations when a business is in financial difficulty, and possible consequences for directors for not adhering to those duties and obligations. There will be discussion on the recent insolvency related changes to Companies Act 2014 on the expansion of directors’ duties. Under the Joint Insolvency Committee’s (JIC’s) strategic work plan, Statements of Insolvency Practice (SIPs) are subject to periodic review in order to ensure they remain relevant to changing legislation and market conditions. Following consultations with the profession and other stakeholders, including the Insolvency Service, HMRC and major creditor representatives, a revised version of SIP 3.1 – Individual Voluntary Arrangements has now been approved by the JIC and the Recognised Professional Bodies for implementation with effect from 1 March 2023.  The revised SIP 3.1 applies in Northern Ireland, England and Wales. Other Areas of Interest The Competition and Consumer Protection Commission (CCPC) recently published its Mergers & Acquisitions Report 2022 which includes statistics on the number of mergers and acquisitions notified and decided in 2022. There was a 16% decrease in notified mergers from 2021 and one proposed acquisition was prohibited. In the case of the proposed banking transaction Bank of Ireland /KBC, the CCPC imposed a commitment on Bank of Ireland of the provision of one billion euro to non-bank lenders to support competitive developments in the mortgage market. In publishing its banking decisions, the CCPC says that it took the opportunity to raise concerns in relation to the overall competitiveness of the banking sector in Ireland and has continued to engage with the Department of Finance and the Central Bank on these matters. Readers can access a copy of the Mergers & Acquisitions report here. For further technical information and updates please visit the Technical Hub on the Institute website.