Welcome to this week’s Technical Roundup.
In developments this week, a new piece of legislation, The Charities Act (Northern Ireland) 2022, is about to come into force, bringing with it a number of changes to charity regulation. The Charity Commission for Northern Ireland has published extensive information on the new Act and the impact it will have on charities and their legal duties and the International Forum of Independent Audit Regulators has published its tenth annual survey of inspection findings arising from its member regulators’ individual inspections of audit firms.
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 updated its Endorsement Status Report following amendments to IAS 12 - Income Taxes.
EFRAG has published its comment letters in response to the IASB's Exposure Drafts ED/2021/9 Non-Current Liabilities with Covenants and ED/2021/10 Supplier Finance Arrangements.
IFRIC, the IFRS Interpretations Committee, have issued their March 2022 update which summarises the decisions reached by the Committee during its meetings on 15th and 16th March. IFRIC has also issued an Addendum to the February 2022 update.
The IASB have issued its March 2022 update and its March 2022 IFRS for SMEs update.
The IFRS Foundation and Global Reporting Initiative (GRI) have announced a collaboration agreement under which their respective standard-setting boards, the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB), will seek to coordinate their work programmes and standard-setting activities.
Auditing
The International Forum of Independent Audit Regulators (IFIAR) has published its tenth annual survey of inspection findings arising from its member regulators’ individual inspections of audit firms. IFIAR’s 2021 survey of inspection findings is available here. 52 IFIAR members contributed to the survey and reported findings affiliated with the six largest global audit firm networks: BDO, Deloitte, EY, Grant Thornton, KPMG and PricewaterhouseCoopers. The inspection results included in the 2021 survey are predominantly for inspections of audits that concluded prior to the advent of the pandemic.
The Financial Reporting Council (FRC) has published the latest list of companies whose reports and accounts have been reviewed by its Corporate Reporting Review function. The list can be viewed here.
The European Securities and Markets Authority (ESMA) has published its report “2021 Corporate reporting enforcement and regulatory activities”. ESMA’s Report aims to assist companies, Audit Committees and their auditors to further improve future financial and non-financial reports, by assessing how companies comply with International Financial Reporting Standards (IFRS) and non-financial reporting obligations and adhere to ESMA’s recommendations. The Report, with the objective of protecting investors, provides an overview of the activities carried out by ESMA and EU national enforcers on financial and non-financial information. The majority of the enforcement actions concerned disclosures to be corrected in the future financial statements.
The Charities Act (Northern Ireland) 2022:
A new piece of legislation, The Charities Act (Northern Ireland) 2022, is about to come into force, bringing with it a number of changes to charity regulation. The Charity Commission for Northern Ireland has published extensive information on the new Act and the impact it will have on charities and their legal duties here.
Sustainability
This week the Irish Government published the Circular Economy bill heralded as a “landmark Bill that will introduce world-leading moves to reduce waste and influence behaviour”. You can read the press release here. The Bill adopts reduce, reuse, recycle principles. It will also empower detection and prevention of unsightly and illegal dumping. Under the proposed legislation it is also proposed to phase out a range of single-use disposable products. Disposable coffee cups will be banned for sit- in customers and there will be a levy on disposable cups. You can read the text of the Bill here.
Consultation on International Sustainability Standards
On 31 March, the International Sustainability Standards Board (ISSB) launched a consultation on its first two proposed standards which stakeholders can respond to:
The creation of the ISSB was announced on 3 November 2021 at COP26 following the increased desire from stakeholders for high quality, transparent, reliable and comparable reporting by companies on climate and other environmental, social and governance matters.
The proposed standards set out requirements for the disclosure of material information about a company’s significant sustainability-related risks and opportunities that is necessary for investors to assess a company’s enterprise value. IFRS Sustainability Disclosure Standards are intended to provide a global baseline and to be compatible with jurisdiction-specific requirements, including those intended to meet broader stakeholder information needs.
The ISSB are inviting comments to the consultations by 29 July 2022.
Anti-Money laundering, Economic Crime, Cyber security
The UK Financial Services Authority recently issued a reminder to all regulated firms of their existing obligations when they are interacting with or exposed to cryptoassets and related services. They set out on their page some areas of risk that firms need to consider and also remind readers of the latest guidance on how firms should manage financial crime risks associated with cryptoassets in the ongoing Russia/Ukraine conflict.
The European Commission recently proposed new rules to establish common cybersecurity and information security measures across the EU institutions, bodies, offices and agencies. The press release describes the proposed Cybersecurity Regulation and key elements of the proposal.
The European Banking Authority recently published the findings from its assessment of competent authorities’ approaches to the anti-money laundering and countering the financing of terrorism (AML/CFT) supervision of banks. It found that anti-money laundering and countering the financing of terrorism supervision is improving but not always effective yet. You can read the press release and conclusions here.
The Central Bank has drawn the reader’s attention to the dedicated webpage the European Commission has set up, entitled Sanctions adopted following Russia’s military aggression against Ukraine, which contains information on the various sanctions adopted, including Frequently Asked Questions. The page is regularly updated, and the Central Bank encourages natural and legal persons to regularly visit this page for the latest information, in particular before contacting the Central Bank with queries relating to sanctions adopted in this regard.
Readers are also again reminded that information on financial sanctions imposed on Russia and Belarus in response to the crisis in Ukraine can be found on the Institute’s dedicated sanctions page. The page is currently being updated regularly.
In their latest instalment of Anti-Money Laundering Thought Leadership series, IFAC and the ICAEW examine recent crime trends.
The UK National Crime Agency (NCA) in a recent tweet reminds readers of the danger of payment diversion fraud, what it is and how to stop it. Please click here for more information. This week is fraud awareness week in Ireland and the Garda National Economic Crime Bureau has warned that email scams are becoming ever-more sophisticated. Recent figures showing that almost €6m was stolen from Irish-based companies via fraudulent emails last year.
This week also the NCA draws attention to and urges the public not to buy in to modern slavery. There is a link to a webpage on ethical consumer choices where you can read more about this.
The Irish Minister for Justice recently published the Justice Plan 2022. The Plan will continue the implementation of the recommendations of the Hamilton Review to tackle white collar crime and corruption .Under goal 1 it is proposed to progress a number of actions to combat money laundering. It states that among Q4 objectives are to implement EU anti-money laundering measures to facilitate the use of financial and bank account information to prevent and combat serious crime more effectively, to strengthen regulatory enforcement capability of the Anti-Money Laundering Compliance Unit (AMLCU) and to support compliance with anti-money laundering legislation through the issuing of a set of written guidelines.
Other Areas of Interest
The Financial Services and Pensions Ombudsman recently published its Overview of Complaints 2021. In her message the Ombudsman referred to investment fraud and cryptocurrency and urged consumers to know the risks. It was noted that banking complaints represent 57% of all complaints received in 2021. Also, among the complaints documented the report provides a number of case studies and their outcome on cryptocurrency.
It is expected that the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill 2021 will be passed into law this year. The Central Bank has recently given Notice of Intention to extend its Retail Credit Firm and Credit Servicing Firm authorisation regimes. This is because following commencement of the legislation, authorisation requirements will be extended to certain entities. For example, entities providing credit through hire purchase agreements; also, certain firms will require authorisation as credit servicing firm. You can read the text of the Notice of Intention here.
The Central Bank Governor and various Central Bank directors are appearing before the Committee on Finance, Public Expenditure and Reform, and Taoiseach this week. You can click on the Central Bank website to read the opening statements of each of the Governor and the Director, Financial Regulation - Policy & Risk.
The European Securities and Markets Authority (ESMA) has proposed targeted amendments to some of its Regulatory Technical Standards (RTS 1 and RTS 2) which specify the Markets in Financial Instruments Regulation (MiFIR) transparency requirements for equity and non-equity respectively.
OECD has recently adopted a recommendation for the good design of defined contribution pension plans. It is intended to assist governments in designing both occupational and personal pension plans where retirement income depends on contributions paid, investment returns, and the way assets are paid out over retirement (defined contribution pension plans).
For further technical information and updates please visit the Technical Hub on the Institute website.
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