Technical resource centre

Welcome to the Chartered Accountants Ireland's Technical Resource Centre. This resource area is aimed at keeping Members up to date with the latest technical news and helpful resources to keep them abreast of current developments worldwide. There is also a link to our Technical Enquiry Service in contacts and support.

Latest news

Developments of interest this week are set out below.  Ireland                  The Central Bank of Ireland and Trinity College Dublin (TCD) recently hosted a joint conference to discuss culture and diversity in the financial services sector in Ireland. The President has now signed Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018 into law. IAASA has published selected financial reporting decisions regarding the accounting treatments applied by Boost Issuer plc, a debt issuer, CRH plc, Kerry Group plc and Ryanair Holdings plc, the latter three being equity issuers. The CRO have issued their regular gazette. UK The Financial Reporting Lab (The Lab) has published guidance for companies on the presentation of performance metrics in their reporting following calls for clarity from investors. European Stories from practice – how can accountants help you? An inspiring series of stories have been issued online by Accountancy Europe on the diversity of accountants’ daily work. International The IASB hosted its fifth Research Forum on 11 and 12 November 2018 in Sydney. The meeting saw the pre­sen­ta­tion of six academic papers, responses by academics and stan­dard-set­ters as well as panel dis­cus­sions.  

Nov 14, 2018

Developments of interest this week are set out below.  Ireland                  The European Securities and Markets Authority (‘ESMA’) has published its annual statement titled European common enforcement priorities for 2018 annual financial reports which sets out those topics which company directors, Audit Committees and auditors should particularly consider when preparing, reviewing and auditing International Financial Reporting Standards (‘IFRS’) financial statements for the year ending 31 December 2018. European national accounting enforcers, including IAASA, will use the ESMA topics in their examinations of companies’ 2018 financial statements with the aim of promoting consistent application of IFRS by European companies in their financial statements The CRO have issued their regular gazette. UK The Financial Reporting Council (FRC) has this week published two thematic reviews to help companies improve the quality of their corporate reporting in relation to the new accounting standards IFRS 9 ‘Financial Instruments’ and IFRS 15 'Revenue from Contracts with Customers’.  Smaller companies should provide more specific disclosures of significant accounting judgements and more quantitative information on key sources of estimation uncertainty according to a new report by the FRC - Reporting By Smaller Listed and AIM Quoted Companies. European The European Securities and Markets Authority (ESMA) has published the responses received to its Consultations on Prospectus. International The IFRS Foun­da­tion has announced the launch of its tech­nol­ogy ini­tia­tive. This ini­tia­tive will consider how changes in tech­nol­ogy may affect the work done by the IASB in certain areas.    

Nov 08, 2018
Press release

On Tuesday afternoon last (23 Oct 2018), a panel drawn from all stakeholders in the audit market, including auditors from the larger and mid-tier audit firms and business leaders told a capacity audience in Chartered Accountants House that the statutory audit is here to stay and continues to deliver a valued service to investors and shareholders. However, in a climate of increasing regulation of all professions, audit practitioners may have to come up with fresh approaches to remain relevant. The benefits and challenges from the imposition of a tighter regulatory audit regime was also debated. Session 1:  Value of Audit Lead Speaker: Michael Cawley, NED and Chair of Audit Committee in Betfair Paddy Power, Kingspan. Panellists: Michael Cawley Andrew Keating, CFO Bank of Ireland Brendan Jennings, MP Deloitte Barry Dixon, Head of Research, DAVY Sinead Donovan, Partner GT  Session 2:  Future of Audit Lead Speaker: Pat O’Neill, Partner EY Panellists: Pat O’Neill Kevin Prendergast, CEO IAASA Ken Bowles, CFO Smurfit Kappa Group Ciaran Hancock, Business Editor, Irish Times Pat Cox, NED and Chair of Public Interest Committee at KPMG Emma Scott, Partner PwC Over 180 delegates at Chartered Accountants Ireland’s conference on ‘The Value and Future of Audit’ were comprised of business leaders, chairs of audit committees, analysts, and preparers of financial information and practitioners who engaged in a lively debate. They heard that that the statutory audit is at a crossroads, with increased scrutiny on the value, quality and purpose of audit.   The debate ranged over a wide range of audit related issues including: The need for greater competition and choice in the audit market and the impact (or not) of the recently introduced EU audit reforms; the societal needs from the statutory audit and whether the audit as currently designed was capable of meeting them; the impact of regulation on the mind-set of auditors and the attractiveness of audit as a professional career. While competition between the larger audit firms is significant, there was an acknowledgement that there are currently too few players in the PIE audit market sector. Possible remedies to this that are currently being debated in the UK include: audit only firms; market share caps; joint or shared audits; total prohibition of provision of non-audit services to audit clients. However we need to be certain that any local remedies are responsive to the particular market in Ireland and also sensitive to the risks of unforeseen consequences. It is not at all evident that these proposed remedies were necessary or relevant in Ireland. Speakers argued that the so-called expectation gap was only partially real. In their experience consumers of audit services, practitioners, regulators, audit committees, boards and analysts all understand the limitations of a statutory audit. However some challenges are less understood in other quarters.  In addressing this gap in perception, the choice is either change perceptions through engagement and communication, or move to meet those expectations and change the audit model. If statutory audit is not meeting the needs and expectations of society then clearly it needs to change.  However, debates and discussions about the nature of such change need to begin from informed positions about what audit currently delivers and the challenge it provides before exploring how it might evolve into the future.  Panellists suggested that some commentators want assurance on businesses that an audit as currently designed can’t provide, and it is up to the profession to communicate the function and limitations of the statutory audit as a foundation for an informed debate.  Speakers argued that, if one of the desired outcomes of the new EU rules governing audit is to avoid binary, pass/fail audit opinions in favour of richer, more nuanced reporting, then the imposition of tighter regulation will have the contrary effect.  In a highly regulated environment the fear would be that the real problems are ignored and instead practitioners just concentrate on being seen to comply with auditing standards instead of adding insight and value. Over-regulation could in fact lead to audits having an increasingly technical focus instead of offering judgement and opinions on points of improvement. This in turn could impact the attractiveness of the profession to high-quality people and its very sustainability. Delegates heard that the audit needs to innovate in order to add value and offer deeper judgement and insight on structures of the business and business model.  One example of innovation put forward concerned how financial results are portrayed in annual reports, and these could be communicated in a more transparent and accessible manner.  Final remarks at the conference went to Irish Times Business Editor Ciaran Hancock, who gave a valuable external perspective.  Drawing attention to recent controversial business collapses where the performance of audits was brought into question, he suggested that the profession has to acknowledge when things go wrong. It is the duty of the media to investigate, and the reality is that interest in audit will only be generated when issues arise. Auditors should also have a clearer sense of their accountability to society, and need to significantly improve how they currently communicate. Mr Hancock said that there are issues with how the outcomes of audits are presented, and simpler, plainer English should be adopted. Deputy President Conall O’Halloran who chaired the conference said: “The idea of this event was to hear from a range of stakeholders who have an interest in statutory audit. “Ultimately, statutory audit is a global service and any remedies to address current problems, real or perceived, must be global. However, for Chartered Accountants Ireland to be able to provide informed comment on the future direction of the statutory audit, events like this are important. “The Institute will now consider the range of views heard in formulating its own contributions to the current debates on the future of audit”. Photos of the Audit event are available here.

Oct 26, 2018

Developments of interest this week are set out below.  Ireland                  IAASA has published findings of a desk-top review into the bank covenant disclosures given by companies in their 2017/18 annual accounts The Central Bank (CB) has published a consultation paper dealing with potential changes to the lending framework for Credit Unions (together with a regulatory impact analysis). The Bank is seeking feedback from credit unions and other interested parties on the proposals, which have emerged from a review of the framework undertaken during 2018.  The CRO have issued their regular gazette. UK The FRC has issued an open letter to Finance Directors and Audit Committee Chairs, calling for improvements in key areas of corporate reporting, including key accounting judgements and estimates, eliminating basic errors and how companies have applied the Principles of the UK Corporate Governance Code. The letter draws on findings from the FRC’s work on corporate governance and corporate reporting in ‘Annual Review of Corporate Governance and Reporting 2017/18’, It also refers to topical areas of reporting, including the UK’s exit from the EU.       European Two years on from their implementation deadline, Accountancy Europe has issued an overview of member states’ implementation of the new audit rules.  The overview sets out an updated state of play in 30 European countries, including 28 EU Member States. The three European Supervisory Authorities (ESA - ESMA, EBA and EIOPA) have  written a letter to the European Financial Reporting Advisory Group (EFRAG) raising concerns regarding the endorsement process of the International Financial Reporting Standard (IFRS) 17. International IASB has issued amendments to IFRS 3, Business Combinations, to improve the definition of a business. The amendments will help companies determine whether an acquisition made is of a business or a group of assets.    The European Financial Reporting Advisory Group (EFRAG) has issued a request for feedback from preparers and users of financial statements to assess the impact of the IASB’s Discussion Paper Financial Instruments with Characteristics of Equity on distinction between debt and equity, by completion of the relevant survey linked in its feedback request.   Completion is requested by 26 November 2018      

Oct 25, 2018

Developments of interest this week are set out below.  Ireland The CRO has issued its latest newsletter.  UK           The Financial Reporting Council (FRC) has published its Annual Report for 2017/18, highlighting the activities undertaken to promote transparency and integrity in business in the light of its 2018/21 Strategy, published in March 2018, identifies objectives and activities designed to continue delivering against the mission.  The FRC has also issued a review of developments in business model reporting.  The report, Business model reporting; Risk and viability reporting – Where are we now? (PDF), considers how reporting practice has changed since its Financial Reporting  Lab published its original reports in 2016 and 2017 and also includes practical examples from companies that have implemented the recommendations in those reports. Europe The European Securities and Markets Authority (ESMA) has issued its Annual Report on prospectus activity in Europe.  The report notes that in 2017 the number of prospectus approvals across the European Economic Area (EEA) increased by around 1.9% compared to 2016 (from 3499 to 3567), marking an end to the decade-long decline observed since the start of the financial crisis. International The International Auditing and Assurance Standards Board (IAASB) has issued an update on activities to support and enhance professional scepticism in audit, including recent and upcoming changes to International Standards on Auditing and work by other IFAC boards.  The publication also refers to current work by the Institute of Chartered Accountants in England and Wales (ICAEW) and its publication ‘Scepticism: the Practitioners’ Take’. The IFRS Foundation has issued its September 2018 Update, highlighting matters discussed at its September meeting.  These include Dynamic Risk Management; Classification of Liabilities; Disclosure Initiative: Targeted Standards-level Review of Disclosures. The IASB is to publish an amendment to IFRS 3, Definition of a Business - expected on 22 October 2018.  The International Public Sector Accounting Standards Board® (IPSASB) has issued an updated Alignment Dashboard, showing how International Public Sector Accounting Standards (IPSASs) compare with corresponding IFRSs. 

Oct 19, 2018

Developments of interest this week are set out below.  Ireland IAASA has published guidelines developed by the Committee of European Auditing Oversight Bodies (‘CEAOB’), of which IAASA is an active member, on monitoring the fee cap on non-audit services.  The guidelines can be accessed here. IAASA has also announced speakers for its upcoming Brexit Breakfast Briefing, to be held on 24 October.  Details and information on booking attendance are available here. The CRO has issued its latest newsletter.  UK            The Financial Reporting Council (FRC) has announced a strategic programme of work to ensure that audit better serves the public interest, including work on auditor independence, audit quality, the future needs of investors, and corporate viability. The FRC has also issued comments on the Competition and Markets Authority’s review of the audit sector, and expressed its intention to work closely with the Authority as it carries out its study.   The Prudential Regulatory Authority (PRA) has issued its Regulatory Digest covering September 2018.  The Digest is intended to provide information for those working in the UK financial services industry and sets out key regulatory news and publications delivered in the month.  Europe As noted above, the Committee of European Audit Oversight Bodies has issued guidelines on applying the fee cap on non-audit services.  The guidelines, also published in Ireland by IAASA, are available on the CEAOB website here, where information about the Committee’s work can also be viewed.    International The International Accounting Standards Board (IASB) has announced plans for its annual Research Forum, to be held in November 2018.  Details of the programme, which includes an analysis of IFRS disclosure requirements, can be viewed here.

Oct 12, 2018

Developments of interest this week are set out below.  Ireland IAASA has issued an Information Sheet providing a summary of findings from a desk-top review of the tax accounting practices of a range of listed companies. The CRO has issued its latest newsletter.  UK The Financial Reporting Council has issued updated versions of the full suite of its XBRL taxonomies for 2019. The Charity Commission for Northern Ireland has opened consultations on two topics; firstly it has developed a new draft Strategic Plan 2019-22, which aims to address how the Commission can fulfil its objectives effectively and efficiently over that period. Secondly, it has opened a consultation on action it proposes to take in relation to charities whose annual reports fail to comply with key requirements Europe The European Securities and Markets Authority (ESMA) has issued guidance to market participants who are required, under the revised Markets in Financial Instruments Directive (MiFID II), to measure their own activity against total market sizes in commodity derivatives. As noted in last week’s eNews, this month also sees two events organised by the European Commission (EC): on 18 October 2018, an open stake­holder meeting on non-fi­nan­cial dis­clo­sures will take place in Brussels; and 30 November 2018 will see a high-level con­fer­ence on "The Future of Corporate Reporting in a digital and sus­tain­able economy", also in Brussels. International The International Auditing and Assurance Standards Board (IAASB) has now released International Standard on Auditing (ISA) 540 (Revised), its revised standard for audit of accounting estimates and related disclosures, initially approved by the Board in June 2018, subject to approval by the Public Interest Oversight Board(PIOB) in September 2018. This revised standard is the first to be completed as part of the IAASB’s broader program ‘Addressing the Fundamental Elements of an Audit’ and is an important part of the IAASB’s efforts to improve audit quality globally.  It also formed the basis of the Irish Accounting and Auditing Supervisory Authority’s Consultation regarding adoption of a revised ISA (Ireland) 540 incorporating revisions by IAASB, issued in August 2018.  A copy of Chartered Accountants Ireland's response to that consultation can be viewed here.  The IFRS Foundation has published its September monthly update, which includes the Chairman's speech to the Accounting Standards Board of Japan; a new webcast on IFRS 17; and news about the first ten modules to support the IFRS for SMEs Standard becoming available. A further 25 modules will be published in the forthcoming months.    

Oct 04, 2018

Developments of interest this week are outlined. ROI The CRO have issued their regular gazette. UK The Prudential Regulatory Authority (PRA) Regulatory Digest - August 2018 issue has just been published. Europe On 18 October 2018, the European Com­mis­sion (EC) is or­gan­is­ing an open stake­holder meeting on non-fi­nan­cial dis­clo­sures in Brussels. On 30 November 2018, the European Com­mis­sion (EC) is or­gan­is­ing a high-level con­fer­ence on "The Future of Corporate Reporting in a digital and sus­tain­able economy" in Brussels. International IAASB – Shape the Future of EER Assurance: Accountancy Europe and the International Auditing and Assurance Standards Board (IAASB) invite you to help shape the future of assurance over emerging forms of external reporting (EER) at a half day event scheduled for Thursday 8 November in Brussels. The September 2018 IFRS Interpretations Committee Update (IFRIC Update) has been published   

Sep 26, 2018

Developments of interest this week are outlined. ROI The Companies (Statutory Audits) Act 2018 (Commencement) Order 2018 was signed by Minister Heather Humphreys on 19 September 2018.  The Order provides that, with the exception of certain provisions, the Companies (Statutory Audits) Act 2018 ('the Act') comes into operation on 21 September 2018. The CRO have issued their regular gazette. NI With resources likely to be cut in real terms over the next few years, the NI Charity Commission has developed a new draft Strategic Plan 2019-22, which aims to address how and to what extent the Commission can fulfil its objectives effectively and efficiently. UK Research conducted for the Financial Reporting Council (FRC) by the University of Exeter Business School shows that only 15% of FTSE100 companies fully complied with the UK Corporate Governance Code’s provision on diversity reporting by describing their policy on diversity and their objectives for implementing the policy.The recently issued Board Diversity Reporting in 2018 provides a snap shot of diversity reporting across the FTSE 350 and identifies examples that lead the way in terms of quality and approach. International The final programme has been released for the upcoming World Stan­dard-set­ters meeting, which is being held in London on 1-2 October 2018. The IFRS Foun­da­tion has issued the 2018 IFRS Taxonomy formula linkbase. It has been updated from the 2017 version and can be used with software tools sup­port­ing the XBRL formula spec­i­fi­ca­tion 1.0.  

Sep 20, 2018